5637
1 MANITOBA CLEAN ENVIRONMENT COMMISSION
2
3 VERBATIM TRANSCRIPT
4 Volume 24
5
6 Including List of Participants
7
8
9
10 Hearing
11
12 Wuskwatim Generation and Transmission Project
13
14 Presiding:
15 Gerard Lecuyer, Chair
16 Kathi Kinew
17 Harvey Nepinak
18 Robert Mayer
19 Terry Sargeant
20
21 Thursday, May 13, 2004
22 Radisson Hotel
23 288 Portage Avenue
24 Winnipeg, Manitoba
25
5638
1 LIST OF PARTICIPANTS
2
3 Clean Environment Commission:
4 Gerard Lecuyer Chairman
5 Terry Sargeant Member
6 Harvey Nepinak Member
7 Kathi Avery Kinew Member
8 Doug Abra Counsel to Commission
9 Rory Grewar Staff
10 CEC Advisors:
11 Mel Falk
12 Dave Farlinger
13 Jack Scriven
14 Jim Sandison
15 Jean McClellan
16 Brent McLean
17 Kyla Gibson
18
19 Nisichawayasihk Cree Nation:
20 Chief Jerry Primrose
21 Elvis Thomas
22 Campbell MacInnes
23 Valerie Matthews Lemieux
24
25 LIST OF PARTICIPANTS
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1
2 Manitoba Conservation:
3 Larry Strachan
4 Trent Hreno
5
6 Manitoba Hydro/NCN:
7 Doug Bedford, Counsel
8 Bob Adkins, Counsel
9 Marvin Shaffer
10 Ed Wojczynski
11 Ken Adams
12 Carolyn Wray
13 Ron Mazur
14 Lloyd Kuczek
15 Cam Osler
16 Stuart Davies
17 David Hicks
18 George Rempel
19 David Cormie
20 Alex Fleming
21 Marvin Shaffer
22 Blair McMahon
23
24
25
5640
1 LIST OF PARTICIPANTS
2
3 TREE/RCM
4 Peter Miller
5 Ralph Torrie
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25 INDEX OF EXHIBITS
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1
2 Number Page
3
4 MH/NCN 1037: Manitoba Hydro's
5 TREE/RCM rebuttal,
6 May 4, 2004 5705
7
8 TREE/RCM 1008: Dr. Peter Miller's
9 presentation to the CEC
10 Wuskwatim hearings 5705
11
12
13 CAC/MSOS 1011: Summary of Manitoba Hydro
14 Calculations of Wind Power
15 Economics, corrected 5810
16
17 MC-1003: Glenboro Rugby Harvey 230 kV
18 Transmission Project Environmental
19 Protection Plan,
20 February 2002 5812
21
22
23
24
25
5642
1
2 INDEX OF EXHIBITS
3
4 Number Page
5
6 MH/NCN 1038: Cross-examination Reference
7 Material CNF/RCM/TREE 1 NFAAT-4
8 REV, Energy Available for Export
9 Medium-Low Load Growth
10 Scenario Median Flow Conditions;
11 Energy Available for Export
12 Medium-Low Load Growth
13 Scenario-Dependable Flow conditions;
14 MH-NCN-NFAAT-S-2a Revised:
15 January 16, 2004 5813
16
17 OTH-1030: Submission by International
18 Brotherhood of Electrical Workers,
19 submitted by Garnet Boyd 5826
20
21 OTH-1031: Presentation of the Assembly of
22 Manitoba Chiefs Secretariat,
23 submitted by Dennis White Bird,
24 Assembly of Manitoba Chiefs 5832
25
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1
2
3 INDEX OF UNDERTAKINGS
4
5 UNDERTAKING NO. PAGE
6
7
8
9 TREE-RCM-84: Provide copy of graph
10 and numbers underlying graph in terms of available
11 resources 5756
12 TREE-RCM-85: Provide underlying
13 values for resources available for figure
14 TREE/RCM/CNF 13.1 5757
15
16
17
18
19
20
21
22
23
24
25
5644
1 THURSDAY, MAY 13, 2004
2 Upon commencing at 9:05 a.m.
3
4 THE CHAIRMAN: Ladies and gentlemen, we
5 may be few in numbers but we're here in quality.
6 We're here to proceed this morning with the
7 presentation from Time to Respect the Earth's
8 Ecosystems, TREE and RCM.
9 Before we begin, I know we're going to
10 have a combination of good and bad. Good today and
11 bad before because you reminded me a while ago, Mr.
12 Torrie, that last time you were here, you got the
13 blame for the bad weather. So today we'll give you
14 the blame for the good weather. It's changed
15 considerably so we expect better conditions.
16 MR. TORRIE: I'm always out of season.
17 THE CHAIRMAN: Mr. Grewar.
18 MR. GREWAR: Gentlemen, could you each
19 state your names for the record, please.
20 DR. MILLER: Peter Miller.
21 MR. TORRIE: Ralph Torrie.
22 MR. GREWAR: Gentlemen, are you aware
23 that in Manitoba, it is an offence to knowingly
24 mislead this Commission?
25 MR. TORRIE: I am aware of that.
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1 DR. MILLER: Yes.
2 MR. GREWAR: Do you promise to tell only
3 the truth in proceedings before this Commission?
4 MR. TORRIE: I do.
5 DR. MILLER: Yes.
6
7 (RALPH TORRIE: SWORN)
8 (PETER MILLER: SWORN)
9
10 THE CHAIRMAN: Now you may proceed.
11 DR. MILLER: Okay. I am going to start
12 out by saying a little bit of why we've been pursuing
13 the intervention and make just a few largely
14 non-numerical observations and then I'll turn it over
15 to Ralph Torrie for the meat of the presentation.
16 TREE, Time to Respect Earth's Ecosystems,
17 and RCM, Resource Conservation Manitoba, are both
18 concerned with issues of applied sustainability.
19 TREE, however, as its acronym implies, has focused on
20 forest issues. Along with most Manitobans, we share
21 a concern for the health and sustainability of
22 Manitoba's forest ecosystems and values. The guiding
23 principles of both organizations are appended to the
24 written copy of this. Unfortunately, I didn't make
25 enough copies to distribute to everyone but I think
5646
1 Rory has made a few for the Commission and perhaps
2 for Hydro.
3 There are links between forest and energy
4 production obviously and the Pembina Institute study
5 done for the screening of the options pointed out
6 some of these in terms of land use and greenhouse gas
7 production. And the one thing that they omitted was
8 energy conservation and that's the thing that we were
9 pushing the most.
10 Manitoba's northern forests have a great
11 deal at stake from climate change, mitigation efforts
12 because of the projected impacts on that forest from
13 global warming. You've probably all seen charts of
14 how the boreal forests will almost disappear in
15 Manitoba, perhaps surplanted by other forests or
16 increased grasslands.
17 And so obviously for those who care about
18 the forests, mitigation is a very important concern.
19 And the project proposes to contribute to that
20 mitigation effort by producing electricity for export
21 that, at least theoretically, and there's some
22 debate, will displace fossil-fuelled generation of
23 electricity in the United States.
24 From the standpoint of the forest, energy
25 conservation is the preferred alternative. The more
5647
1 energy that is saved by Manitoba consumers, or
2 produced by alternative means, the more that is
3 available for export without the impacts of new
4 impoundment or the swath of new transmission
5 corridors through forests entailed by the
6 hydroelectric development. And of course
7 conservation and alternative generation in markets
8 where the base load is fossil-fuelled will directly
9 reduce greenhouse gas emissions.
10 So these are some of the basic and
11 perhaps obvious links between concern for the forest
12 and concern for energy just to indicate why TREE is
13 here.
14 Another observation is that hydroelectric
15 power, although a renewable resource, is still
16 finite. Manitoba Hydro estimates there are still
17 another 5,000 megawatts of capacity on the Nelson
18 River system. But when that is gone, then what?
19 Will the head be raised at Wuskwatim to realize 350
20 megawatts of capacity? Will the Hayes River be
21 exploited next? What is the end game when the
22 potential for the Nelson and perhaps other available
23 sites has been fully exploited? Dam the remaining
24 free-flowing rivers in Manitoba? Burn more fossil
25 fuel from Alberta or from more remote and sensitive
5648
1 sites offshore and in the Arctic?
2 Even if one were to grant, for the sake
3 of argument, that the impacts of further development
4 on the Burntwood and Nelson systems were tolerable,
5 the imperative to conserve remains. Growth in energy
6 consumption, hence generation, cannot proceed forever
7 nor is it too soon to contemplate that end game.
8 Just checking Manitoba Hydro's website, I
9 saw that 3,700 megawatts of the existing Nelson River
10 capacity came on line in the short space of 16 years
11 from 1974 to 1990. A similar building binge, and
12 we've seen one projected, could complete the job in a
13 comparatively short time. So that establishes a
14 social imperative for conservation.
15 Now, what are the figures? We've all
16 heard of the OECD comparison which indicates that
17 North Americans and Canadians in particular are
18 energy hogs. 27th out of 29 OECD nations in terms of
19 energy use per capita, that's Canada, using almost
20 twice as much as the OECD average. And increasing
21 per capita use at a greater rate than the average
22 OECD increase since 1980.
23 Moreover, Canada is 28th out of 29 in
24 energy efficiency or the term energy productivity has
25 been used in these hearings and Mr. Torrie uses that
5649
1 term. The energy used per dollar of gross domestic
2 product. And that's 33 per cent less energy
3 efficient than our major trading partner, the U.S.
4 and less than half as efficient as the OECD average.
5 This should obviously be a matter of
6 concern for anyone who cares about the environment
7 and the economy and is seeking a path to
8 sustainability.
9 MR. MAYER: Before you go on, are those
10 numbers correct? You call this 27th out of 29th.
11 How could we be so much above the average? Are you
12 sure it isn't 27 out of 29 in terms of energy
13 efficiency?
14 DR. MILLER: Inefficiency. I mean
15 it's --
16 MR. MAYER: 27 out of 29 in terms of
17 energy use per capita. That sounds pretty good.
18 DR. MILLER: That sounds good?
19 MR. MAYER: That's what it says.
20 DR. MILLER: Well, you want a low figure
21 per capita rather than a high one.
22 MR. MAYER: If I --
23 THE CHAIRMAN: It's the wording.
24 DR. MILLER: Yeah, okay.
25 MR. SARGEANT: We're 27th worst.
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1 DR. MILLER: 27th worst on the scale.
2 MR. MAYER: Okay. That's not what it
3 says.
4 DR. MILLER: Thanks for the
5 clarification.
6 In each case, it's towards the bottom
7 and it means we're 28th out of 29 in energy
8 efficiency which means that there are 27 more
9 efficient than we are. And this record is 33 per
10 cent less efficient than the U.S.
11 It is sometimes argued we live in a cold
12 climate, are spread out over large distances and have
13 attracted energy-intensive industries so that,
14 regrettable as it may be because of the environmental
15 impacts, we should resign ourselves to our standing
16 as energy hogs. Moreover, such resignation may be
17 further excused in Manitoba by the fact that our
18 hydroelectric energy supply makes our Manitoba
19 economy less carbon-intensive than others.
20 On the contrary, I believe that the more
21 energy we consume and the less energy efficient is
22 our economy, for whatever reasons, the more it is
23 incumbent upon us to ask how we can improve that
24 situation.
25 Is it just physical climate and geography
5651
1 or is it a social climate of practices, policies,
2 regulations, standards, incentives, investments,
3 infrastructure and performance measures that is at
4 fault?
5 The fact that we are part of a
6 continental grid also means that our consumption
7 patterns and conservation efforts do indeed affect
8 continental greenhouse gas emissions, which has been
9 an essential part of the Hydro submission.
10 So we can't be unconcerned about these
11 matters in Manitoba.
12 Unfortunately, in Manitoba we've had
13 little opportunity to examine and debate questions of
14 energy policy as a whole. As a province, we
15 developed an array of sustainability policies through
16 public consultation but an energy policy was not
17 among them.
18 More recently, the Climate Change Task
19 Force chaired by my President at the University of
20 Winnipeg, Lloyd Axworthy and Public Utility Board
21 rate hearings have provided two windows on aspects of
22 an energy policy. Consideration of the
23 justification, need for and alternatives to Wuskwatim
24 advancement is a third such window.
25 So that provides our rationale for
5652
1 engaging in this intervention.
2 Okay. Where does Manitoba stand now?
3 Well, Ralph is going to give certainly a more
4 detailed analysis of this but I'd just like to make a
5 few observations.
6 The social imperative is, first, for
7 energy conservation and efficiency measures and,
8 second, for least impact generation options. And
9 where do we stand in Manitoba?
10 In our closing argument to the 2002 PUB
11 intervention, found at Appendix 5 of our compiled
12 written submissions which were distributed a couple
13 of days ago to the people who were intervening in the
14 NFAAT part, we pointed out that the Sustainable
15 Development Act and the Manitoba Hydro Act provide a
16 sound legal base and a legal requirement to respond
17 to the social imperatives of sustainability and
18 efficiency in the policies and practices of Manitoba
19 Hydro including the promotion of end-use efficiency
20 of customers.
21 And these same Acts also provide, the
22 Sustainability Act in particular, that Manitoba's
23 regulatory and review bodies, like the PUB and CEC,
24 are similarly bound. Thus, Manitoba has many of the
25 right principles in place even if performance is
5653
1 sometimes spotty. The challenge is to translate
2 these legal mandates into practice and we still have
3 a ways to go.
4 Looking at Manitoba Hydro's corporate
5 strategy and goals. It is important to get these
6 right because as they indicate in their strategic
7 planning document, that is supposed to guide
8 everything that they do.
9 We note the addition of a new corporate
10 goal of being a leader in implementing cost effective
11 DSM measures and we hope this signals a shift from
12 the position taken by management in the 2002 hearings
13 that DSM is, I'm quoting, "not a social
14 responsibility that we bear." It's a legislated
15 requirement.
16 The Manitoba Hydro Act says otherwise.
17 Identifying the notion of end-use efficiency is one
18 of its purposes. But you need more than just a goal,
19 you need performance measures and we indicated that
20 these were lacking. There have been some exchanges
21 in the interrogatory process which suggests some ways
22 of doing a measurement and comparison. And perhaps
23 with the new end-use data, there can be comparisons
24 between how energy efficient a typical Manitoba home
25 is compared with one in another jurisdiction. So I
5654
1 hope that those will be explored.
2 There is also a need to revise the
3 statement of purpose of the PowerSmart program to
4 include a reference to the environmental and
5 sustainability benefits that it evokes in it's
6 advertising. The branding of PowerSmart through
7 images of children embracing nature suggests that a
8 sustainability purpose directs energy conservation
9 programs.
10 However, when one turns to the corporate
11 purpose for implementing demand-side management, one
12 finds instead two economic objectives: To provide
13 alternative cost effective methods of power supply
14 and to minimize the total cost of energy services to
15 customers. There's nothing about how can the
16 footprint of Manitoba Hydro and of its customers be
17 reduced. And yet, that would seem to be an essential
18 part of the rationale, certainly recognized in the
19 advertising.
20 It could be interpreted as somewhat
21 cynical to say we know our customers have these
22 environmental values and we're going to appeal to
23 them in our advertising but they are not at the core
24 of our program planning. I'm not saying this is not
25 true of many Hydro personnel but I'm just saying
5655
1 institutionally when you identify the purposes of
2 your PowerSmart program, you have to bring in the
3 environmental benefits, the environmental links. And
4 that still needs to be done. I hope that will be
5 done when you revise your next PowerSmart plan.
6 And finally, the purpose of our last PUB
7 intervention and the current one is to look at
8 perverse incentives and so on that might be related
9 to rates. We asked what are the implications of low
10 electricity rates in Manitoba for energy conservation
11 given the general economic principle that lower costs
12 of a product tend to increase its consumption. And
13 we sought to explore rate options that were more
14 favourable to conservation and proposed an inverted
15 rate for the residential sector. And the PUB ordered
16 that Hydro study inverted rates for all customer
17 classes as well as some other measures that might
18 contribute to conservation.
19 In our view, there are a number of
20 factors that depress Manitoba's rates such as those
21 identified in our response to
22 CAC/MSOS/TREE/RCM1-NFAAT-8. We argued that current
23 methods of allocating costs and the system export
24 dividend, which are the foundation of rate setting,
25 are both inefficient and inequitable.
5656
1 They are energy inefficient because low
2 cost power encourages wastage and reduces the
3 incentive to conserve. That principle was
4 uncontested at the hearings. They are
5 environmentally inefficient because the wasted energy
6 is unavailable to displace greenhouse gas producing
7 fossil fuel generation elsewhere on the continental
8 grid thus adding to the global environmental costs of
9 North American electricity.
10 They are economically inefficient because
11 wasted energy is non-productive and using the system
12 export dividend that sales to the States and the
13 profits to subsidize inefficient consumption makes
14 the dividend unavailable for more productive
15 investments including conservation investments that
16 would reduce energy wastage and customer bills and
17 increase the system export dividend to Manitoba.
18 And we argue that these subsidized rates
19 in the present manner of the subsidy are inequitable
20 because higher consuming customers grab more than
21 their share of both the benefits of low cost
22 resources in the system, such as the Winnipeg River
23 generation which doesn't face the long transmission
24 and has depreciated capital costs. And the export
25 dividend earned by a crown corporation and resource
5657
1 belonging to us all.
2 So you get what, to my mind, is the
3 outrageous situation of the entrepreneurial profits
4 from exporting electricity to U.S. markets being
5 redistributed to the bottom lines of other
6 corporations and not to the owners of the
7 corporation, which is the government on behalf of us
8 all.
9 Now the point of these conclusions for
10 the Wuskwatim hearing is that as part of a concerted
11 effort to adhere to the principles of sustainability
12 and the Manitoba Hydro legislated mandate to promote
13 efficient production, distribution and end-use of its
14 product, we have to stop subsidizing the wastage of
15 energy and promote the preferred alternative to
16 Wuskwatim of energy conservation.
17 It is possible to stop subsidizing
18 wastage of energy while still trying to reduce
19 customer energy costs. Two principal ways of doing
20 this are, first, to redirect subsidies from rates to
21 conservation measures and within the rates from the
22 tailblock rates to the initial block rates and fixed
23 charges. That is, the subsidies which lower the
24 costs should be applied not uniformly across the
25 pricing of electricity but to places where they will
5658
1 have -- the subsidies will have less effect on
2 conservation.
3 It is possible to do this in a revenue
4 neutral way that will lower the bills of conservers,
5 raise the bills of larger consumers, bring tailblock
6 rates closer to the marginal cost of energy and thus
7 increase the incentives and cost-effectiveness to
8 consumers of conservation measures.
9 My final observations are about the new
10 PowerSmart standard for new homes. Finally, with the
11 new home program, it encourages building to a new
12 PowerSmart standard. And the intention of this
13 program is to increase the penetration of efficiency
14 measures and new home construction. That's good.
15 But it is disappointing that it falls short of what
16 the DSM report says is the cost effective R2000
17 standard. So we're settling for less than we should.
18 The lower interest rates of recent years
19 have created a new housing boom. It is a failure of
20 regulation and building standards that all of this
21 new construction represents lost opportunities and
22 embodied inefficiency that is not readily corrected.
23 And the PowerSmart New Home Program is supposed to
24 lessen this but it will not eliminate that. And I
25 think we should be able to do better.
5659
1 I note that Hydro indicates in its second
2 rebuttal that the program was developed in
3 consultation with industry advisory teams. Where
4 were the conservation groups, the consumer groups and
5 municipalities in these consultations? Builders have
6 frequently resisted implementation of the highest
7 conservation standards because of incremental initial
8 costs even though these more than pay for themselves
9 in the long run, perhaps not to the builder who
10 doesn't pay the auto utility bills. And so that's
11 just an observation on one of the points in the
12 rebuttal.
13 So those are my initial comments. And
14 for the remainder of the presentation, I'll turn it
15 over to Ralph.
16 MR. TORRIE: Thank you, Peter. And good
17 morning, members of the panel and Commission I should
18 say and everyone else. I now feel responsible for
19 the weather. And it's the second time I've come here
20 and it's had unusual weather events following me it
21 seems, although I was kind of enjoying it. I went
22 for a walk down to the train station last night and
23 just when I got there, the cross-Canada train was
24 making its 45 minute stopover. So there were
25 tourists streaming out of the station with their
5660
1 cameras, getting their pictures taken in the snow of
2 Winnipeg in the middle of May and everybody was
3 having a good time with it. So that will be their
4 memory of their Winnipeg stop on their cross-Canada
5 trip.
6 MR. SARGEANT: I'm glad somebody is
7 enjoying it.
8 MR. TORRIE: Yeah. And the station too,
9 it's really nice what they've done there. It's quite
10 a historic place.
11 What I wanted to do, first of all, is
12 tell you what I'm going to try and do. I'm never as
13 well prepared or as eloquent as my client beside me.
14 But what I would like to try and spend a little bit
15 of time doing is, first of all, addressing the NFAAT
16 question in a general way because I think that
17 probably the single -- in my view at least, the
18 single biggest and most important observation that I
19 have made in my sort of experience with this process
20 and with this proposal, which obviously has not been
21 as intense as yours, is that there wasn't really an
22 NFAAT case on the table and I want to talk about that
23 a little bit. And then I'd like to just highlight
24 some of the analytical work we did. I am not going
25 to go into a lot of detail.
5661
1 There is a rebuttal that had arrived, I
2 don't know exactly when, around a week ago or so from
3 Manitoba Hydro that responded to a lot of the
4 information that we provided in the interrogatory --
5 in our interrogatory responses and it's about a 36
6 page document. I have had a chance to read that in
7 addition to having read most of the NFAAT case. I
8 read both binders. I think I've read all of the
9 NFAAT interrogatories. I haven't understood them all
10 but I've read them all. Some of them I've read a few
11 times. And so I have a fairly extensive familiarity
12 I guess with the NFAAT part of the case, or at least
13 what was called the NFAAT part of the case. And then
14 I would like to just sort of wrap up with a few other
15 observations.
16 Peter referred, in his opening remarks,
17 to a compilation of our prepared statement from
18 February as well as the interrogatory responses that
19 we put together in order to hopefully facilitate the
20 discussion here today. And there is one small
21 difference between the material and the binder and
22 what you may already have and that is in the main
23 submission, which is the first section in the binder.
24 At the end of each of the sections, there is an
25 indication which of the interrogatory responses also
5662
1 relates to that particular question.
2 So it's a cross-referencing system, in
3 other words, where you can quickly find at the end of
4 each response in the main document where else you can
5 read material in the interrogatory responses that is
6 relevant to that point.
7 And the other thing that we did just by
8 way of leafing through this document. If you haven't
9 already noticed, if you take a look at the appendices
10 1, 2, 3 and 4, in each case, both the header and the
11 footer have information that tells you which appendix
12 you're in. So for example, Appendix 1, you can see
13 right away, as you're leafing through, that it's the
14 Canadian Nature Federation questions because it
15 starts with CNF. And you can also see which
16 interrogatory you're looking at because the
17 interrogatory number is also right in the header and
18 the footer. So we've tried to do a couple of things
19 like that to make it a bit quicker to leaf back and
20 forth between the cross-references in the main text
21 and the interrogatory responses that they are
22 referring to.
23 We came into this exercise about a year
24 ago, not even a year ago really, and agreed to
25 undertake what we thought would be an analysis of a
5663
1 full-fledged Need For and Alternatives case by
2 Manitoba Hydro. So I had certain expectations about
3 what I was going to find. And when it wasn't in the
4 main submissions, and I'll be more specific in a
5 moment about what I'm talking about, we tried to ask
6 interrogatories to see if perhaps it was there but
7 just not well-reflected in the main submissions. And
8 the interrogatories confirmed that what I would call
9 a Need For and Alternative analysis was never really
10 done in the preparation of this proposal. And it's
11 not even clear from the responses from Manitoba Hydro
12 that they know what it means, at least as an
13 organization.
14 What I mean at least, and perhaps I'm
15 being presumptuous because there are obviously a lot
16 of interpretations of what NFAAT is, but it seems to
17 me that central to the concept of Need For and
18 Alternatives in environmental assessment, and more
19 generally in planning, is that requirement that you
20 stand back from what it is that you're doing,
21 identify what the fundamental purpose of that
22 undertaking is and define and analyze other ways that
23 you could achieve that fundamental objective. That's
24 what NFAAT analysis is all about.
25 In a slightly different way, that's what
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1 the witness, I think it was Mr. Harper, have I got
2 his name right, yesterday, for the Consumers
3 Association, was talking about when he said you need
4 to be doing full portfolio analysis for this kind of
5 an investment decision. And it's not there in the
6 Hydro case.
7 And so the first thing that I did then, I
8 guess from a legal point of view, one could have just
9 thrown up their hands at that point I suppose and
10 say, well, there is no NFAAT case on the table so
11 there's nothing to talk about. But we were
12 determined to try and go further than that with the
13 resources that TREE and RCM had from the funding
14 process. So we set out to try and illustrate what a
15 NFAAT case might have looked like, one example or
16 maybe a couple of examples if it had been put
17 forward.
18 And even before you can start that
19 exercise, you really have to make sure that you have
20 that central definition of the objective and the need
21 of the undertaking clear in your mind.
22 And it actually is not as easy as it
23 might have been to pull it out of Manitoba Hydro's
24 evidence on the Need For and Alternatives. One would
25 expect it to be right there and labelled as such.
5665
1 But the passage that it seems to me most concisely
2 summarizes the need that should have been the focus
3 of an NFAAT analysis is this passage from I believe
4 Volume 1. It's right out of our main submission and
5 the full reference is in the written material. But
6 the word "primary" is highlighted because I think
7 here we have it, perhaps it's obvious to everybody,
8 and I think there is agreement on this point that the
9 primary objective of this particular proposal is to
10 maintain current export revenues and profits. That's
11 the primary objective.
12 I don't think there's anything else that
13 comes close to it in terms of the motivation for why
14 we're all here right now. I know there are a lot of
15 other things that are listed as justifications for
16 building the dam but this is what I think should be
17 the focus of an NFAAT discussion, is what are the
18 other ways that you could maintain current export
19 revenues and profits? And what are the other ways
20 that one could identify for investing the type of
21 money that is being -- that will be required to bill
22 Wuskwatim in those alternatives.
23 It's not the same thing as saying that a
24 particular investment stays profitable or doesn't
25 stay profitable under different sensitivity analyses.
5666
1 That's not an NFAAT analysis. You can call it one
2 but that doesn't make it one. You know, if it's not
3 a duck, you know, calling it one is not going to make
4 it quack. And when you look at what we got from
5 Manitoba Hydro over and over and over again on the
6 question of NFAAT, it was always but it will make
7 money no matter what else happens. And that may be
8 true but it's not the central issue in an NFAAT
9 analysis.
10 What we would have expected and hoped to
11 see is a full portfolio analysis starting with an
12 integrated look at the end-use structure of the
13 future demand for energy starting in the market, in
14 other words, and developing one's business plans and
15 strategies from the market. And that's what we
16 didn't get.
17 And there was a passage in one of the
18 interrogatory responses that we received, number 32b,
19 and I had a bit of an ah-ha moment when I read this
20 because I think it really epitomizes what was lacking
21 in some ways in the approach that was taken by
22 Manitoba Hydro to the NFAAT question. They state
23 quite clearly here that they don't start with the
24 market, that they really start by assessing a project
25 that's been defined with respect to how it would fair
5667
1 under different conditions in a market-place.
2 And that's a tried and true way of
3 running an electric utility, make no mistake about
4 it. But it also represents a supply-oriented and
5 somewhat anachronistic approach to planning in the
6 21st century. We would have hoped to have seen a
7 more services demand-oriented market-based philosophy
8 pervading the NFAAT question as opposed to the more
9 engineering project-specific orientation that we
10 found and which is reflected -- and which is a
11 reflection of a philosophy that is apparent in this
12 passage from Manitoba Hydro's evidence.
13 So I mean I know it's probably too late.
14 I guess it's too late. I've never really understood
15 what all the rush was about around this dam but, you
16 know, I'm not from here. But perhaps it's too late
17 at this point for an NFAAT analysis to be required of
18 Manitoba Hydro and it's not obvious that you could
19 get it because it's not clear that the capacity is
20 there to do it yet.
21 But this is not going to be good enough
22 as we look forward to the future of energy and
23 resource and sustainable planning for the 21st
24 century. We've got to move on to a much more
25 integrated market-based and end-use approach to the
5668
1 way that we think about our energy system and the way
2 we evaluate particular investments in it.
3 So I wanted to say that first because I
4 guess I've been starting to think about what will be
5 the lessons learned hopefully or what will be the
6 recommendations at least that I would make for what
7 needs to happen in the NFAAT area with regard to
8 energy planning in general and Manitoba Hydro in
9 particular and I think that it still has a way to go
10 in that regard.
11 Faced then with that basic starting
12 point, and you know with not a lot of resources
13 compared to the mountain of evidence and analyses
14 that we had to try and assimilate and understand,
15 what we decided to do was to take almost an auditor's
16 perspective, if you like, towards the quantitative
17 analyses that had been presented and the data that
18 had been presented by Manitoba Hydro on the question
19 of the demand for electricity. And we did this in a
20 series of steps. And I'll say I'd like to highlight
21 a little bit about what we did in each of those
22 steps. But I will tell you what they wear first or
23 remind you what they wear.
24 The first thing that we did is we tried
25 to take the load forecast. In our case, it was the
5669
1 2002 load forecast which still did not have the
2 Winnipeg service area integrated into the totals.
3 And that presented us with a significant problem that
4 we had to solve. Starting with that load forecast in
5 one hand and the consultant studies that were done on
6 the DSM market potential in the other hand --
7 actually you can't hold all three of them in one
8 hand, you'll break your arm -- but starting with
9 that, we constructed a description of electricity use
10 both in a base year and out to the year 2018,
11 2017/18, we work on the fiscal year systems on this,
12 in which the forecast could be described in an actual
13 end-use model. Not just for the residential sector
14 which Manitoba Hydro already does, but also for what
15 gets lumped together into the general service class
16 in the load forecast and which includes all
17 industrial and commercial electricity use in the
18 province. And so we spent quite a bit of time trying
19 to tune, if you like, our end-use spreadsheet type
20 models to the 2002 load forecast.
21 And what an end-use model basically does
22 is it represents let's say electricity use as the
23 product of an activity variable and an electricity
24 intensity variable. And there's two or three others
25 that come into it. But essentially, it says the
5670
1 electricity use in Manitoba will be the number of
2 single family detached houses multiplied by the
3 electricity use per refrigerator, multiplied by the
4 number of refrigerators in each house. And then you
5 repeat that calculation for apartments and you repeat
6 it for other appliances and you repeat it for the
7 houses and the buildings and the industries
8 themselves. And you build from the bottom up a
9 description of the electricity use, both now and in
10 the forecast, that is rooted in an actual physical
11 description. So you have square metres of commercial
12 floor area multiplied by electricity use per square
13 metre in the commercial sector. And in the
14 industrial sector, we worked with electricity per
15 dollar and dollars of output, as did the Manitoba
16 Hydro consultants in that case.
17 And essentially then, you need this to do
18 a DSM analysis because to do a DSM analysis, you need
19 to go back and look at that line, for example, that I
20 just was describing that tells you how much
21 electricity is being used in refrigerators in single
22 family dwellings and you do an analysis about what
23 you can do about that, how much more efficient can
24 you make those refrigerators.
25 So end-use models are particularly useful
5671
1 and I would say even necessary to do good market
2 planning for DSM.
3 And when you try to do this, almost
4 invariably, I don't know if I've ever seen a utility
5 load forecast successfully tuned or calibrated, if
6 you'd like, to an end-use model where you didn't end
7 up having to make some assumptions that didn't seem
8 right in order to get the end-use model to agree with
9 what the utilities load forecast was putting out
10 there as the future demand for electricity.
11 And this is what you would expect because
12 it's a completely different way of thinking about the
13 future of electricity use and it forces you to try
14 and imagine some kind of a real future that would use
15 the amount of electricity that your forecast is
16 telling you is going to be used in a particular
17 economic case.
18 And what we found when we did this with
19 the Manitoba Hydro 2002 forecast, a couple of things.
20 First of all, in order to tune our end-use model to
21 the 2002 load forecast, we had a problem in the
22 commercial sector and we had a problem in the
23 industrial sector. We accepted all of the Manitoba
24 Hydro consultant's assumptions about electricity use
25 per square feet metre of floor area and all of that.
5672
1 But we -- and we accepted -- well, we didn't have
2 quite the same floor area profile but, you know, we
3 basically didn't disagree with any aspect of the
4 commercial reference projection, I think it's called
5 in the DSM studies, except that in order to tune up
6 to what we thought at the time was, and I don't think
7 we're actually that far off, was the total commercial
8 electricity use in Manitoba in 2002. A number which
9 by the way does not appear in the load forecast. You
10 have to deduce it. At least you used to have to
11 deduce it.
12 You know, we have a whole lot of new
13 evidence that's come in this rebuttal which needs to
14 be examined and we won't have an opportunity to do.
15 But what I would say is that we found that the growth
16 rates of the commercial building types that you would
17 have to have in terms of how a floor area would have
18 to grow in order to keep up with the forecast even
19 with the efficiency improvements that were being
20 assumed by the DSM consultants were just not
21 believable.
22 And this is the point that we discussed
23 when we were here to cross-examine Manitoba Hydro and
24 I just distributed a table directly from their
25 evidence showing the rates of growth of commercial
5673
1 floor area that are necessary in order to tune up to
2 the forecast.
3 And so that was one area where we think
4 that the end-use model was basically telling us that
5 the commercial electricity probably was not going to
6 be as high as the forecast was suggesting.
7 And then the other one was the industrial
8 sector. And in this case, we were thrown off the
9 trail for a long time because of the errors in the
10 industrial sector DSM report which got corrected
11 incorrectly. So it was really -- you know, it was a
12 real drag for us the amount of additional time that
13 it took to sort through that, but these things
14 happen.
15 In the end what we found there, however,
16 is that the -- we adopted the same business as usual
17 improvement in electricity productivity as had been
18 used in the DSM potential study report. I didn't
19 think we had at first but when we finally got the
20 correct information from Manitoba Hydro, it became
21 apparent to me that it wasn't the industrial
22 electricity productivity that we disagreed with, it
23 was again the rate of output growth. And the output
24 growth rates of industries in the industrial DSM
25 market potential study are way out of line with the
5674
1 output growth rates in Manitoba Hydro's economic
2 outlook. They are not even close. They are taken
3 for reasons that I don't -- I cannot fathom from a
4 federal greenhouse report of some sort that had some
5 economic scenarios in it for the provinces. And I
6 don't think there's any direct connection with
7 Manitoba Hydro's own economic outlook there. But I
8 would love to be stand corrected on that.
9 So this was a difficult issue for us
10 because we didn't have something like floor area or
11 physical barrier to work with, we only had dollars of
12 output and growth in that. So what we did is we did
13 an analysis of Manitoba Hydro's GDP over the past 15
14 or 18 years and we used Statistics Canada data to do
15 this. And we looked at what the relative growth
16 rates were of the different economic segments within
17 Manitoba over that same period. And it turned out
18 that I think it was a 15 year historical growth rate
19 in GDP in Manitoba, industrial GDP, was about the
20 same as what was in the economic forecast of Manitoba
21 Hydro.
22 So what we decided to do was make the
23 assumption that if you indeed did have another 15
24 years of industrial output growth, like you just had
25 the last 15 years, the same rate, that we would also
5675
1 assume that the structure stayed the same. So the
2 growth is there in all of the energy intensive
3 industries which grow faster than the average because
4 that's what happened in that past 15 years in
5 Manitoba.
6 So the underlying driver of our
7 industrial forecast is still quite aggressive on
8 electricity intensity industry in Manitoba and I
9 think it's still quite aggressive, and by that I mean
10 toward the high side, on the question of industrial
11 output growth in general.
12 But it still means that when you combine
13 it with the electricity use per dollar of output
14 characteristic of those industries, with only a 0.9
15 per cent per year improvement assumed as a background
16 sort of level before DSM programs, and that's quite
17 modest, that you still end up with electricity use in
18 the industrial sector that comes out below the load
19 forecast.
20 So I think it's important. And in all of
21 the highlights that I wanted to touch on with you
22 today with respect to the analysis that I did, please
23 remember that none of this was done with the
24 resources that could have and should have been
25 brought to bear on these questions by Manitoba Hydro.
5676
1 And secondly, that it's not really the responsibility
2 of an organization like TREE or RCM to have to try
3 and be the one that comes to a hearing like this and
4 shows what an NFAAT analysis would have looked like.
5 And all we can do with the resources that -- you
6 know, we should have been here responding to one. So
7 all we can do with the resources we had -- you know,
8 we came to assess an NFAAT argument, not to make one.
9 So all we could do with the resources
10 that we had was pretty quickly, as these things go,
11 sketch out some scenarios of what it would look like
12 because we thought if we could sort of almost draw a
13 picture of what we're talking about, that maybe we
14 could finally connect with Manitoba Hydro where
15 there's been such a disconnect throughout the hearing
16 on what is meant by an NFAAT analysis. So that's why
17 we were doing it.
18 So when I talk about the first step,
19 which was to critically assess the load forecast, we
20 may not have found everything that could be found in
21 a more thorough analysis and we may very well have a
22 base year starting number which is too low. This was
23 one of the points that was raised in Manitoba Hydro's
24 most recent rebuttal.
25 It's a very complicated thing to really
5677
1 know but it would have -- I should say it's a
2 complicated thing to change. And I'll come back to
3 this question of the base year number in a moment.
4 But the bottom line was that we felt that just even
5 starting with the base forecast for 2002 and not the
6 medium low forecast but accepting the population and
7 the economic growth assumptions of the base forecast
8 but examining the end-use structure of the system, we
9 felt that the Manitoba Hydro load forecast was too
10 high for those economic inputs. And I still do.
11 I think that I would just like to remind
12 you about the discussion that we had when I was last
13 out here in helping to cross-examine Manitoba Hydro
14 and we were talking about the load forecast. And a
15 load forecast, in a nutshell, involves having some
16 assumptions about the future rate of economic growth
17 and how electricity demand is going to be affected by
18 that. And when Manitoba Hydro creates the medium low
19 and the medium high variations on their base
20 forecast, they do so by assuming different
21 demographic and economic futures.
22 We didn't do that. We kept the
23 demographic and economic assumptions that are in
24 Manitoba Hydro's economic outlook and reflected in
25 their base forecast. What we did, and this was the
5678
1 issue that we talked about last time I was here, is
2 we went in and looked at the relationship between the
3 economic growth and electricity use and how that was
4 changing and how that was likely to change. And that
5 led us on the basis of this analysis I was mentioning
6 a moment ago in the commercial and in the industrial
7 sectors to create what I call an adjusted version of
8 the base forecast that you see in a lot of our
9 evidence.
10 So the way that all of this comes into
11 the NFAAT discussion, this is a famous graph that is
12 a reproduction of the original by the artist known as
13 Manitoba Hydro. But this is basically, I think it's
14 figure 5.5 from volume 1 of NFAAT if I'm not
15 mistaken. And this is not my idea, this is the
16 graphical method by which Manitoba Hydro made its
17 case in Volume 1 of NFAAT for why there was a need
18 for building, not only building but advancing
19 Wuskwatim.
20 And I don't think there's much need to
21 even summarize what this means because I think this
22 figure has been pretty thoroughly discussed here.
23 But that large blue block goes down directly in
24 relation to the load forecast going up. It
25 represents the amount of power that would be left for
5679
1 the export market after domestic demand is met under
2 medium flow conditions, et cetera, et cetera.
3 And the turquoise represents the power
4 that would be delivered if Wuskwatim was brought on
5 line. And I think this one is still showing 2009/10
6 for start-up.
7 And at that 10,500 gigawatt hour line
8 represents the estimated on-peak export market
9 which, as you know, is constrained by operational and
10 technological factors to that level at this time.
11 And when we were finished this analysis
12 that I was telling you about just now and we adjusted
13 the forecast, it had the effect of moving that blue
14 block up, pushing Wuskwatim over the 10,500 line, if
15 you like, and moving the domestic need date out to
16 the year 2035. And it's very similar to the impact
17 of assuming the low -- medium low forecast. It's in
18 the same order of magnitude but we got there by a
19 completely different route which did not make any
20 assumptions about lower economic growth or lower
21 population growth as I was just saying a moment ago.
22 This might be an appropriate time since
23 this really is an illustration of the adjusted or the
24 reference projection if you'd like. I'm sorry, this
25 is the one with the medium low. Well, that's
5680
1 interesting actually. The one I was showing you is
2 what happens if you assume the medium low load
3 forecast according to Manitoba Hydro's numbers.
4 There are some errors in the
5 representation of the medium low forecast in the
6 Hydro evidence and I only discovered that very very
7 late in my work. And I don't know how widespread it
8 is and whether that issue has been cleared up or not,
9 but there are some places where the numbers in the
10 Manitoba, and I point this out in a footnote to one
11 of the interrogatories where there's definitely been
12 some kind of an error made in the representation of
13 the medium low and the medium high forecast.
14 But presuming that this is true, then
15 this is the effect of the medium low. And this
16 graph, which looks very similar, is the result of the
17 adjustments that I was just discussing.
18 Now, this might be an appropriate time to
19 respond to this issue of the base year of electricity
20 use which is raised in Hydro's recent rebuttal that
21 has been provided to us. And I don't know if this
22 has an exhibit number or not, does it? Maybe it
23 should if we're going to be talking about it today.
24 Would that be appropriate or how does that work?
25 THE CHAIRMAN: It will be given an
5681
1 exhibit number immediately after your presentation.
2 Or we could do it now, Mr. Grewar, if you wish.
3 MR. GREWAR: Sorry, Mr. Chairman, we have
4 some other items. Perhaps at the end.
5 MR. TORRIE: Just for the record, I'm
6 referring to something called Manitoba Hydro's
7 TREE/RCM rebuttal. And it's actually undated. And
8 that may just be a fault of my printer but I think it
9 came out about a week or so ago. And there's --
10 MR. MAYER: The last page is dated.
11 MR. TORRIE: Is it? Oh, okay. Great,
12 that's right. There we go. 05/04/2004, which is the
13 month and which is --
14 MR. MAYER: I would suspect that's May
15 4th.
16 MR. TORRIE: Right, okay. Do you have
17 that document today?
18 MR. MAYER: Yes. It was our homework
19 last night, Mr. Torrie.
20 MR. TORRIE: Oh, yeah. If you turn to
21 page 30 of that document, table 1.7, you will find a
22 comparison or an attempt at a comparison of our
23 reference projection for electricity use. And that's
24 this adjusted forecast that I've been talking about.
25 And historical electricity use for various years,
5682
1 some fiscal, some not. And I mean like I say, we
2 haven't had resources to really go into this in the
3 detail that one would like but there's a couple of
4 things that I'd like to draw to your attention.
5 First of all, the top half of that table is the
6 numbers don't include Winnipeg Hydro. And I think it
7 might not have been as clear as it could have been,
8 the reason that those numbers for 2002 sales only add
9 up to 16,400. And then down on the bottom, you see
10 2003 sales at 19,206. Well, sales did not go up by
11 3,000 GWh in one year in Manitoba, what happened is
12 the Winnipeg Hydro numbers are integrated in the
13 numbers in the bottom part of the table and are not
14 integrated in the numbers in the top part. That's
15 one thing I just wanted for clarity. I hope I'm
16 right about that. It's not my document but that's
17 what it looks like to me.
18 And then what they've done in the bottom
19 half of the document, I have to say this annoys me,
20 they have attributed growth rates to our reference
21 projection by taking something called an actual 2003
22 sales number, and I understand that's a calendar
23 year. I don't know if it's weather corrected or not.
24 I presume it is.
25 Part of the problem, and this is a more
5683
1 generic problem that we have with this document, is
2 there is considerable information we've never seen
3 before coming out here and some of it we don't
4 totally understand and some of it I think we might
5 wish to challenge, but I don't know how one deals
6 with that this late in the process.
7 But what they have then in the column
8 beside that actual 2003 sales figure is the
9 electricity use in 2017/18 in our adjusted forecast.
10 And then they used those two numbers to come up with
11 reference growth rates for our projections. Well,
12 these are not the reference growth rates for our
13 projections, these are the growth rates that you get
14 if you splice a different starting year onto our end
15 year and recalculate the growth rates. And it's not
16 a valid method. It makes a certain point but you
17 can't turn around and say that Torrie is saying that
18 the reference projection in the commercial sector is
19 negative .4 per cent. We were plus 1.1 per cent I
20 think in the commercial sector.
21 So notwithstanding the question that -- I
22 mean the issue that is underneath this is that the
23 actual electricity use in the year that we used for
24 the base year, which was actually not the one
25 portrayed here but the year before that, actually it
5684
1 was fiscal 2002/03. So it was mostly 2002 with the
2 first three months of 2003.
3 We were possibly in our reference
4 projection too low, maybe by 300 or 400 gigawatt
5 hours. I don't know. It's not a simple thing to
6 know for sure because in order to really change that
7 year, you'd have to recalibrate the whole model. And
8 it would also change one's DSM estimates.
9 So there is a discussion over the
10 appropriate base year number in all of this but
11 please don't refer to this as indicating that our
12 reference projection had negative growth rate. It
13 did not. And it's a misrepresentation to suggest
14 that.
15 And I am in no way suggesting it's
16 deliberate. Frankly, I don't think Manitoba Hydro
17 has done a lot of end-use calibration of their
18 forecasts. And this is probably somewhat new to
19 them. But what you need to recognize in end-use
20 analysis is that the dynamic of a particular scenario
21 or forecast is a somewhat separate thing from its end
22 points. And we had positive growth rates in all of
23 the sectors in the dynamics of our reference
24 projection. We could not have because we were using
25 Manitoba Hydro's activity economic forecast to drive
5685
1 the thing. And there isn't much electricity
2 efficiency improvement embedded in Manitoba Hydro's
3 forecast as we know.
4 However, I did, after reading this, I
5 took a look like here, for example, on the screen,
6 you're looking at the effect of introducing the
7 adjusted forecast on how that Need For graph appears.
8 And this is what it looks like. I had done a 400
9 gigawatt offset and it does substantially lower
10 everything obviously and but I can't respond in any
11 more detail to this because it's just come at me. I
12 do know that the year that's the calendar year 2003
13 that's represented in this comparison was not our
14 base year and shouldn't be used to calculate growth
15 rates for the work that we did.
16 Once we had the forecast that we've felt
17 comfortable with -- you see, the dilemma that you've
18 got when you are doing this kind of work is you have
19 to -- if you're using an end-use model, to then go in
20 and start estimating where the DSM opportunities are,
21 you have to have a believable starting point. And if
22 the schools in your model are growing at 10 per cent
23 per year, because that's what they have to to agree
24 with the forecast, you can't, it's crazy. We know
25 they are not. So that's the kind of adjustment that
5686
1 we did.
2 And then we proceeded to take a look at
3 the economic potential for DSM. And here, the
4 exercise was, as I said earlier, more one of an
5 auditor than starting with a clean piece of paper and
6 doing a completely independent analysis. So we did
7 go through and identified some technologies and made
8 arguments for why we felt the threshold was too low
9 and produced a different estimate of the economic
10 potential for DSM from Manitoba Hydro's.
11 And if you look at CNF -- hang on. I
12 lost track of my place here, sorry. If you look in
13 the appendix that has the CNF interrogatory
14 responses, I believe it's Appendix 1 -- I'm sorry, I
15 can't find the table I needed.
16 MR. WILLIAMS: Might it be number 9, page
17 2?
18 MR. TORRIE: CNF 9, 2?
19 MR. WILLIAMS: Try that one.
20 MR. TORRIE: Yeah, I'm looking for the
21 one that compares the DSM estimates. And you know
22 what, it may be one of the responses to you, to the
23 Consumers Association. You're right, CNF 9.1 on page
24 2 of that interrogatory response. It's called table
25 TREE/RCM/CNF 9.1. Thank you, Mr. Williams.
5687
1 And if you look at the third column of
2 numbers, the one labelled economic potential DSM, and
3 at the very bottom, if you look at the totals, the
4 one that's labelled Manitoba Hydro (MPS), that's
5 Market Potential Study, is at 3,500 gigawatt hours of
6 DSM. We ended up lowering that number after we
7 adjusted the forecast because you can't save
8 electricity in schools that don't exist.
9 So one of the effects of adjusting the
10 forecast down is that it reduces the amount of DSM
11 that you will have in your economic potential
12 assessment even without changing any of Manitoba
13 Hydro's assumptions about which technologies are in
14 or out. And then we added back in the technologies
15 that are discussed in the evidence that we thought
16 should be included. And that brings us up to our
17 estimate of 4,500 gigawatt hours.
18 And so there is a difference there. I
19 frankly don't think that it's a turning point issue
20 in this hearing because the quantity, regardless of
21 whether it's 3,000 or 4,500, is so much higher than
22 what the utility is intending to mobilize that. The
23 much more important question is, is the gap between
24 any of those numbers and the likely effect of the DSM
25 activities.
5688
1 So that in a nutshell, I think in that
2 table, gives you a sense of the perhaps the range of
3 difference on this question. And I am not going to
4 spend more time detailing how we did that because
5 it's described in the evidence and no doubt there
6 will be more that comes out under cross-examination
7 on that.
8 Again, referring to the second rebuttal
9 of Manitoba Hydro. In their critique in here of our
10 assessment of DSM potential, there are a number of
11 responses that are made which, in many cases are --
12 well some of them are not really responsive. And if
13 you're a sharp reader, you see those for yourselves.
14 But there's some which are only partial responses.
15 And where the point that is made in response is
16 actually quite secondary to the main point to which
17 it's supposedly responding to.
18 For example, on the question of
19 commercial buildings, you know, I really think that
20 the electricity savings that are available as the
21 result of recommissioning and retrofitting of natural
22 gas-heated buildings is quite a significant item that
23 I don't think has been properly assessed in the
24 potential.
25 And I guess what we'll probably try and
5689
1 do is provide an itemized list of responses to the
2 rebuttal. I mean we're running on empty a little bit
3 at this point but there's so many of these little
4 things that need to be addressed that we'll provide a
5 written list of comments on the rebuttal.
6 The next thing that we did in our
7 approach then, having assessed the load forecast and
8 assessed the economic potential for DSM is we then
9 took a look at Manitoba Hydro's actual DSM or
10 PowerSmart activities and programs and planning
11 processes with a view to asking ourselves whether or
12 not the achievability which they seem to have been
13 satisfied with in the past or, for that matter, in
14 their existing plan really represents what could be
15 and perhaps should be the targets for a public
16 utility like Manitoba Hydro.
17 So in order to do this, we did spend some
18 time looking at practices in other jurisdictions,
19 something that we do on an occasional basis in any
20 event as part of the work that we do. And one of the
21 things that is important to understand with regard to
22 this whole question of DSM achievability is that that
23 industry has been on one heck of a roller coaster for
24 the past 10 years, past 15 years really. And by that
25 I mean the electric power industry. And the changes
5690
1 have manifested themselves in different ways in
2 different jurisdictions. But everywhere, DSM
3 investment took a huge dive in the mid-1990s. It was
4 a very very dramatic falling off of billions and
5 billions of dollars of investment in DSM and it
6 happened very quickly over only about an 18 month
7 period from when the curve started to fall until it
8 sort of started to slow down a little bit. So it
9 basically went into free fall. There's a number of
10 ways that you can explain this, depending on what
11 lens you look through.
12 For me, fundamentally what happened is
13 that the electric utility sector in the 1970s and
14 1980s, they just failed to read their market
15 properly. They just didn't see it coming. And this
16 was true everywhere. And it was true not only of the
17 electric utility industry but of all the energy
18 commodity supply industries including the solar
19 industry, including the -- remember the synthetic
20 fuels industries and all the crazy ideas that were
21 getting all kinds of money thrown at them in the late
22 seventies and early 1980s because if everybody
23 thought that if OPEC Oil was going to go up and up
24 and up in price, we needed to find alternative
25 sources of supply.
5691
1 So the nuclear industry and the solar
2 industry and the energy commodity industry in general
3 responded to the first round of price shocks with
4 huge plans for scaling up mega project investments of
5 all sorts from the tar sands to the north sea from
6 Ontario's nuclear program to the hydroelectric
7 developments of Quebec. All of this was part of a
8 huge wave of investment that was committed in the
9 belief that the only way that one was going to be
10 able to have energy security in an OPEC world was by
11 having more and more diverse and alternative sources
12 of supply. And obviously there's some truth in that.
13 But it wasn't any of those mega projects
14 that really saved the day, it was what happened on
15 the demand side. Between the early seventies and the
16 mid 1980s, the energy productivity of all of the OECD
17 countries increased by 30, 35 per cent, including
18 places like Denmark which were already highly
19 efficient to start with.
20 And that increase in energy productivity
21 delivered more energy security to us and is still, to
22 this day, continuing to deliver more energy security
23 to us in the western world than all of the new oil,
24 gas, hydro, nuclear, coal, everything else added
25 together. That's how big it is. And that's what
5692
1 broke the back of OPEC. It wasn't the North Sea, it
2 wasn't the Gulf War, it wasn't the tar sands, it was
3 what happened on the demand-side.
4 But the flip side of that, and it's
5 actually quite a good news story for the western
6 mixed economies. But if you were one of those energy
7 commodity producers or electric utilities that made
8 large investments in gearing up for a demand curve
9 that never materialized, then the consequences could
10 be fairly severe.
11 And that's what happened in the electric
12 utility sector throughout North America. They went
13 into a very significant investment overshoot from
14 which they never really recovered in the form that we
15 were in before. And that, in some ways, triggered
16 the restructuring and re-regulation of that industry
17 that has been going on now for the last 10 or 15
18 years.
19 And DSM was a casualty of the
20 restructuring and re-regulation activities that were
21 occurring. But it was also the case that many many
22 utilities found themselves in surplus supply
23 situations even without finishing all of the projects
24 that they started in the seventies and eighties.
25 So DSM took a dive. And some North
5693
1 American entities stayed in, Manitoba being one of
2 them. Manitoba is playing on the weekend, if you
3 want to use a sports analogy when it comes to DSM,
4 but many dropped out altogether. The ones that did
5 stay in, there were dramatic reductions in what they
6 were doing. They retreated into a lost opportunity
7 at best sort of mode. And we saw the rate of
8 improvement begin to languish as a result,
9 improvement in electricity efficiency.
10 DSM is now on a resurgence. It's
11 coming out of the ashes, if you like, in different
12 forms, depending on what sort of re-regulation and
13 restructuring history a particular jurisdiction
14 has been through. So in some places, where there
15 no longer is a large electric utility with a
16 monopolistic control on the market-place, the DSM
17 activity is being sponsored through things like
18 public benefits charges where the operator of the
19 wire system in the jurisdiction puts a charge onto
20 all of the users of the transmission system that
21 is applied to investments in DSM and green power,
22 for example.
23 What's extraordinary about the
24 situation here is that Manitoba Hydro has survived
25 as a public utility. That by itself actually is a
5694
1 fairly rare thing, even in Canada, when you stop
2 to think about it. A lot of our big public
3 utilities are not quite so public as they used to
4 be. But you still have that.
5 You also have gas and natural gas
6 within the same corporate structure. And it seems
7 to me that this means that there are opportunities
8 for DSM to be developed in this Province which are
9 probably greater than they are in many places
10 where a lot of the capacity that you still have
11 has been dismantled, and where there isn't still
12 as much of a commitment to the types of values
13 that we associate with Winnipeg and with Manitoba
14 which are so much a part of a community-based
15 energy efficiency and sustainable development that
16 we're talking about.
17 So I think that the bar for this
18 Province should be set very high when it comes to
19 achievability. And I think that that means
20 looking at not this silly question that there's
21 been this debate going on, Manitoba Hydro said
22 they were the best or they were among the best.
23 And we said, well, maybe, maybe not. And they
24 said oh, we are too. I mean, you know, in the
25 rebuttal, for example, they say don't compare our
5695
1 2001 numbers to the American 2001 numbers, compare
2 our 2004 numbers about what we're going to do with
3 the American 2001 numbers. I mean, come on.
4 The fact is, however, that Manitoba
5 Hydro, it's there. I wouldn't put it in the lead
6 group. But, you know, if you want to say you are
7 in the lead group, you know, if it helps -- I
8 don't want to have that argument anymore.
9 But more importantly is what are the
10 most effective approaches that can be taken to
11 getting as much of that economic potential as
12 possible into place. And I think the answer to
13 that can often be found not even among -- well,
14 among some of the best practitioners today, but
15 also by looking at some of the best programs as
16 they existed or as they were conceptualized during
17 the first round of DSM. Because we're not even
18 back there yet. We're not even close to being
19 back to the levels of investment in DSM that were
20 occurring in the late eighties and early nineties.
21 And even at the rate it's growing, it won't be
22 back there for some time.
23 So there was a lot going on back then.
24 And there was some very advanced approaches,
25 including here, that probably need to be revised
5696
1 and dusted off and put forward as models.
2 So in the end, you know, I don't think
3 that a program that would double the DSM is
4 particularly out of line at all. I think that a
5 three times DSM scenario would be an achievable
6 stretch target in Manitoba. So I don't think that
7 there's much question that if there had been, you
8 know, a full NFAAT analysis done in this case,
9 that would obviously have included an attempt to
10 look at whether or not you could achieve the
11 objective of maintaining export revenues through
12 different strategies and advancing Wuskwatim, then
13 a much larger DSM program would have revealed
14 itself than the one Manitoba Hydro has, you know,
15 and hasn't updated now for a couple of years.
16 It's interesting, by the way, that we
17 keep getting told not to worry, building Wuskwatim
18 won't affect anything we do on DSM. We're going
19 to do all the DSM we can. But I'm sure when I was
20 out here this winter, somebody asked, why don't we
21 have an update to the PowerSmart program? And
22 people say, well, we've been too busy with
23 Wuskwatim. And I thought, man, it's already
24 having an affect, you know.
25 The preparation of a new DSM strategy
5697
1 has taken second place to the priority that's been
2 given to the Wuskwatim proposal. We'll get around
3 to it later.
4 I think that what we then did at the
5 end of all of this, and there's a number of these
6 different scenarios in the written evidence, is we
7 just played with them and we did a lot of these.
8 And I am not going to go through even all of the
9 ones that are in the evidence book. But what we
10 found was that the scale of the numbers that we
11 are talking about, even within the disagreements
12 that exist over base years and growth rates, puts
13 us within the range where there would be a surplus
14 of power available for export over and above the
15 estimated on-peak market most of the time without
16 advancing Wuskwatim. It's not an insane concept.
17 It's not something that is so completely off the
18 wall it's not even worth considering. It should
19 have been considered. And if it had been, I think
20 that Manitoba Hydro would have found all kinds of
21 pleasant and positive surprises about the business
22 attractiveness of a strategy which puts supply
23 expansion in second place and puts the focus on a
24 market-based energy services, DSM oriented
25 strategy that can deliver sooner and more cheaply
5698
1 and with less risk than expansion on the supply
2 side.
3 And this particular one that's up on
4 the screen now shows the same chart we were
5 looking at earlier only with 500 megawatts of
6 wind, eventually by the middle of the 20 teens,
7 and three times the current DSM which is the
8 target that I was referring to a moment ago, and
9 building it on a forecast which conforms to our
10 adjusted basic.
11 I did take a look at adding another
12 400 gigawatt hours onto the adjusted forecast as a
13 way of at least getting a sense of the impact and
14 adjustment to our base year would have. And here,
15 for example, is the way the previous chart looks
16 with that kind of an offset. And it does --
17 obviously everything sinks by that amount, but we
18 found still within quite plausible ranges that
19 there were actually definable alternatives to
20 Wuskwatim that could have been brought before the
21 Commission by the proponent and compared with
22 Wuskwatim and Wuskwatim advancement, but were not.
23 And we think they are very interesting
24 scenarios. We've pointed out in our evidence many
25 of the benefits we think would flow from them.
5699
1 They are the types of scenarios that are
2 consistent with the principles that Dr. Miller was
3 describing in his opening comments and in which
4 both TREE and RCM subscribe, which is that we need
5 to start now to put ourselves on a footing toward
6 sustainable energy futures. And they are more
7 effective and more equitable in their distribution
8 when it comes to issues such as job creation and
9 economic impacts. And they allow the supply-side
10 expansion, when and if it might occur, to be built
11 on a much more solid base of efficient electricity
12 use, which of course reduces again the risk and
13 strengthens the case for future investment plans
14 on the supply side.
15 So I think it was a missed
16 opportunity. And I think that there was an
17 opening represented by all the effort that went in
18 to applying for permission to build this dam,
19 there was an opportunity there to move the power
20 planning process forward to a more integrated and
21 market-based philosophy, customer-oriented
22 philosophy, if you like, and sort of missed the
23 boat.
24 It's not as big a dam as it could be.
25 The risk of these things goes up in proportion to
5700
1 the size of the project. But that might actually
2 be another reason why this is the project that
3 ought to have been used to develop the type of
4 NFAAT analyses that we are going to need if we are
5 going to navigate through the very difficult
6 climate change/energy/environmental nexus that
7 we're facing.
8 So, I mean, I could go on about this
9 but I think I would like to wrap up now before
10 people start nodding off in boredom. But just to
11 reiterate, I think that, number one, I did not
12 find what I would consider an adequate NFAAT
13 analysis in the Hydro material. I just don't
14 think it's there. Number two, I think that if
15 they were practicing a more intensive and end-use
16 oriented planning within the organization, that
17 they would be able to -- that they would find that
18 their load forecasting could be improved by doing
19 that as I think it has been in the residential
20 sector. And they would find that it would give
21 them the tools to do the type of marketing and
22 business planning which is going to be essential
23 if we are going to sort of turn the corner on
24 sustainability.
25 Maybe since I started off by
5701
1 preaching, I'll come back to that, but I spent
2 most of my time, in one way or another, trying to
3 think of ways of making sustainable development
4 actually happen. I was part of a group that sort
5 of got involved in this about 20 years ago and I'm
6 way beyond -- I'm at the stage now where I really
7 had been trying to work on practical strategies
8 for getting this, in the case of my specialty,
9 energy onto a more sustainable pathway. And I had
10 been particularly involved in the climate change
11 issue.
12 And I've just spent the last two days,
13 in fact your Minister was at the same meeting,
14 Minister of Energy -- and I think the Premier was
15 supposed to be but got snowed in because the
16 meeting was in Toronto -- of an invited group of
17 about 70 people from around the world to spend a
18 couple of days taking stock of where we stand on
19 the climate issue. And we had one of the world's
20 leading authorities on what's going on with the
21 science of climate change there to brief us on the
22 latest information and findings in that regard.
23 And a number of large corporations were
24 represented, who are achieving very large
25 reductions in their emissions and energy and are
5702
1 feeling that this is the economic future. This is
2 an initiative which has got a lot of support from
3 the British government, because Prime Minister
4 Blair I think has particularly recognized the
5 economic opportunity by pursuing the environmental
6 technologies and the emission reduction targets.
7 But what's clear to me is that if and
8 when we get serious about responding to the
9 climate change issue, and we have not yet,
10 notwithstanding the framework convention and
11 notwithstanding the Kyoto protocol, the types of
12 emission reductions that we are going to have to
13 achieve within this century, if we are going to
14 stop this problem from getting completely out of
15 control -- and it's going to be a rough enough
16 ride as it is now, the types of strategies and the
17 types of effort that it will take are so far
18 beyond what we're contemplating now that you need
19 to -- that you can -- the potential is there to
20 repeat history in the sense of missing what is
21 going to have to happen on the demand side in the
22 energy economy.
23 If we successfully address climate
24 change, there will be a transformation on the
25 demand side of the energy economy the likes of
5703
1 which will make our heads spin. Because that's
2 the only way that you can get to the low emission
3 future. You need the 100 mile a gallon car and
4 you need the energy efficient office buildings and
5 you need the R-2000 and better housing, and you
6 need the Energy Star appliances, and you need all
7 of that to happen. And what's holding us back is
8 not an absence of technology, and it's not an
9 absence of economic technology. That's the other
10 thing that's becoming very clear from all the
11 analysis that's been done.
12 We've shown in Canada, for example,
13 the possibility of a 50 per cent reduction in
14 greenhouse gas emissions using technologies that
15 we can point to which are either economic or on
16 the cusp of being economic. So that's not the
17 issue. The issue, just like it is with DSM here
18 in Manitoba, is achievability. It's mobilizing
19 the institutional and financial innovations and
20 solutions that can unlock that potential.
21 And I think that I wanted to end by
22 saying that that's another reason and perhaps a
23 more important reason why finding a way to make
24 sure that Manitoba Hydro becomes an instrument for
25 the transition to sustainable development is so
5704
1 important, because the challenge is really an
2 institutional and a financial one. And it begs
3 out for the type of mixed economy, public
4 investment, perhaps public utility type approach
5 which has worked so well here in Manitoba for so
6 long. Thank you.
7 THE CHAIRMAN: Thank you, Mr. Torrie.
8 Thank you, Mr. Miller. We shall take a 15 minute
9 break at this point, be back at five to 11:00.
10
11
12 (PROCEEDINGS RECESSED AT 10:43 A.M.
13 AND RECONVENED AT 11:04 A.M.)
14
15 MR. GREWAR: Mr. Chairman, if we might
16 just enter two exhibits while we're waiting for
17 everyone to get organized. The exhibit that Mr.
18 Torrie referred to is actually a Hydro exhibit.
19 It would be the Manitoba Hydro's TREE/RCM
20 rebuttal, Time to Respect Earth's
21 Ecosystem/Resource Conservation Manitoba rebuttal.
22 And that was actually submitted to the Commission
23 several days ago, and it would be MH/NCN 1036.
24 That's MH/NCN 1036.
25 And the only other item that I think
5705
1 we would enter would be Dr. Miller's presentation
2 to the CEC Wuskwatim hearings and that would be a
3 TREE exhibit, TREE/RCM 1008.
4 MR. MAYER: Mr. Grewar, I could have
5 sworn we did Hydro 36 yesterday?
6 MR. GREWAR: I will check.
7 DR. MILLER: One is a TREE rebuttal
8 and the other is TREE/RCM rebuttal.
9 MR. GREWAR: You certainly are sharp,
10 Mr. Mayer. It is true. We did 1036 yesterday
11 late afternoon. And so this would be, once again
12 to correct, Manitoba Hydro's TREE/RCM rebuttal
13 would be MH/NCN 1037. My apologies.
14 (EXHIBIT MH/NCN 1037: Manitoba
15 Hydro's TREE/RCM rebuttal, May 4,
16 2004)
17 (EXHIBIT TREE/RCM 1008: Dr. Peter
18 Miller's presentation to the CEC
19 Wuskwatim hearings)
20 THE CHAIRMAN: Thank you, Mr. Grewar.
21 We'll now go to the questions. Mr. Mayer?
22 MR. MAYER: Mr. Torrie, although this
23 Hydro exhibit I'll call 37 appears to have been
24 produced on May 4th, we got it yesterday with
25 clear instructions from Secretary Grewar that that
5706
1 was our homework to read for last night, and I
2 did. And I did note with interest on page 4 of 36
3 in response to TREE's allegation that the Hydro's
4 DSM program lacks continuity and characterizes the
5 program as on again/off again. And Hydro's
6 response was hardly a response in that it admitted
7 that it was on again/off again. It was on when
8 Conawapa was going to be built. It was off after
9 Conawapa wasn't going to be built. It went on
10 again. That appears to be a clear admission.
11 However, you made reference about a 10
12 per cent growth in schools and how that would be
13 totally unrealistic. Can you refer me to which
14 piece of this document -- and I am assuming you're
15 referring to this document, Exhibit 36 -- deals
16 with a 10 per cent growth rate in schools?
17 MR. TORRIE: First of all, I didn't
18 have the correct figure in front of me. It's not
19 10 per cent. I don't know what it is. I was just
20 trying to illustrate a point that we got into
21 during the cross-examination of Hydro earlier this
22 winter when we were looking at the growth and
23 floor area of different building types that would
24 have to take place in order to tune up to the
25 level of commercial electricity use in the
5707
1 forecast. And it resulted in floor area growth
2 rates which were high, especially for some of the
3 sectors which are related more closely to
4 population than to economic output, like for
5 example, schools. And there was a table that was
6 used that day. I'm just trying to see if I can
7 lay my hands on it.
8 MR. MAYER: Table 1.4 on page 25 of 36
9 deals with growth rates, growth percentages by
10 building type. It shows school is 3.8, college is
11 0.9. Table 1.5 deals with load forecast by
12 building type, no percentage. But if I calculate
13 the numbers, it certainly doesn't come out to 10
14 per cent a year although it may come out to 10 per
15 cent over the 20 years, which doesn't sound as
16 unreasonable to me as you suggested it should.
17 MR. TORRIE: Right. I'm sorry, I
18 shouldn't have even said 10 per cent. I was only
19 trying to illustrate that we found growth rates
20 that seemed large, 3.8 per cent. Is that what you
21 are seeing there?
22 MR. MAYER: I saw that at one page.
23 MR. TORRIE: And that's an annual
24 growth rate?
25 MR. MAYER: I'm not entirely sure.
5708
1 MR. TORRIE: I don't think it's for
2 floor area, because Hydro doesn't generally -- I
3 think it's probably for electricity use, isn't it?
4 Which page was it?
5 MR. MAYER: I was looking at page 25
6 of 36.
7 MR. TORRIE: These are growth rates
8 and electricity use you're looking at. And the
9 issue that I was referring to was that in our
10 reference projection where we were trying to tune
11 our model to Ontario Hydro, to Manitoba Hydro's
12 load forecast, we found that the only way we could
13 do it was by using growth rates in commercial and
14 institutional building floor areas that seemed
15 quite high. And that was one of the adjustments
16 we made in doing the adjusted forecast.
17 MR. MAYER: All right. I was
18 concerned about this 10 per cent growth rate of
19 schools, because I could see 10 per cent over time
20 with the introduction of computers. We could not
21 see a 10 per cent annual growth rate, nor can I
22 find it in any of Hydro's materials.
23 MR. TORRIE: Fine, thanks.
24 MR. MAYER: I have only one other
25 question, Mr. Torrie. Exactly when did we break
5709
1 the back of OPEC? I am now paying 86.9 cents a
2 litre for my gas.
3 MR. TORRIE: Yeah. Well, then some
4 other things happened later.
5 MR. MAYER: I have no further
6 questions. Thank you, sir.
7 THE CHAIRMAN: Mr. Torrie, I just
8 wanted a sense of, in general terms, what your
9 position is in regards to the viability of the
10 proposal made by Manitoba Hydro/NCN in terms of
11 they have made a commitment to 250 megawatts of
12 wind power, twice DSM along with this 200 megawatt
13 project. I'm not sure if it's 250 megawatt
14 wind-generated energy or 200. But are you saying
15 that if all of these targets are achieved, this
16 puts Hydro in a situation where it has surplus
17 power for sale and that, as a result, increases
18 the risk to an extent which is beyond the hurdle
19 rate which is what we've heard here today or since
20 the hearings are on?
21 MR. TORRIE: I think if I understand
22 your question that my answer is yes. That the
23 general impression that one gets from the Manitoba
24 Hydro evidence is that they don't think that
25 there's any credible scenario in which they would
5710
1 not be able to sell most, if not all, of their
2 power into that high priced market. And I think
3 that there are some scenarios that should have
4 been looked at in which you could get over that
5 line. And if you advance Wuskwatim, I think it
6 becomes even more likely that you could get over
7 that line, but presumably we'll be on a down again
8 DSM curve if that starts to happen.
9 THE CHAIRMAN: Mr. Sargeant.
10 MR. SARGEANT: A question for Dr.
11 Miller. In your opening comments, you made a
12 somewhat passing reference to the cold climate and
13 the large distances in the country. And I'm just
14 wondering how much our climate does contribute to
15 the fact that Canadians -- and I have read
16 anecdotally Manitobans are very high users of
17 electricity or energy -- how much does our
18 climate, given the fact that our winters are
19 pretty cold, our summers can be pretty hot, how
20 much does that contribute to our excessive use or
21 apparent excessive use of energy?
22 DR. MILLER: Well, I certainly am not
23 in a position to break out the numbers. I mean,
24 this was basically a response that we encountered
25 that of course our energy consumption is up there.
5711
1 And I mean, it's not unreasonable to think that
2 that is a significant contributor to it. But what
3 we were looking at is, you blame the climate for
4 everything, then that suggests that there's
5 nothing that we, as a society, could or should do
6 about it, that it's inevitable. And I think first
7 of all, on the climate issue itself, it's been
8 pointed out that in the States, the heat,
9 particularly in the southern states, is such that
10 the air conditioners are on for many more months,
11 or equivalent months anyhow, of what our heating
12 season would be. And so there are climate factors
13 on the other side as well. But the question is
14 whether this is exacerbated.
15 I mean, if we live in a cold climate,
16 one would expect peak standards of conservation,
17 right? But the reflexive response has been, keep
18 the energy rates low. And this is done sometimes
19 by, as in earlier years, cutting back on
20 investments in conservation. It's done by, I
21 believe this is the case, not attaching a
22 Provincial sales tax to energy consumption for
23 heating. It's done by the fact that we have a
24 Crown corporation which doesn't have to pay
25 dividends to anyone. It wasn't considered
5712
1 extraordinary. It made a lot of people angry,
2 which the Provincial government did on a one-time
3 basis to deal with the budgetary problem, but why
4 shouldn't there be a regular dividend built into
5 the structure?
6 MR. MAYER: Some of us agree with
7 that.
8 DR. MILLER: And just to point out
9 that there are different ways of dealing with
10 windfall profits from a Provincial resource.
11 Alberta created a Heritage Fund out of its
12 windfall, achieved in different ways, through
13 royalties, of energy sales. And that goes to
14 social investment. An Albertan to buys gas at the
15 tank, they don't have the sales tax, but they are
16 basically paying market rates to fuel their car,
17 they are paying market rates I believe for their
18 electricity.
19 MR. MAYER: But we had a rebate on
20 natural gas, a direct rebate from the Heritage
21 Fund a couple of years ago.
22 MR. SARGEANT: Which would correlate
23 to the policy decisions of Manitoba to keep Hydro
24 rates low for --
25 DR. MILLER: Except that's a one time
5713
1 event versus a continuous subsidy to the program.
2 MR. SARGEANT: But, I mean, it's
3 arguable that that may or may not be a legitimate
4 policy decision, to keep the rates low for all
5 Manitobans.
6 DR. MILLER: But in my brief I was --
7 MR. SARGEANT: I don't really want to
8 debate that point.
9 DR. MILLER: Okay.
10 MR. SARGEANT: Mr. Torrie, in your
11 concluding comments, well throughout your
12 presentation but in your concluding comments, you
13 made the point that in your view, Hydro has not
14 made a very good case for the NFAAT.
15 Now, if they had made a good case, in
16 your view, would it have shown that there was no
17 need -- or if they had made a better case, it
18 would show that there is indeed a need for
19 Wuskwatim?
20 MR. TORRIE: I think that, to be
21 careful, to make sure we're using the terms the
22 same way on this, the need for Wuskwatim has to be
23 defined before I can answer your question. And if
24 the need for Wuskwatim is to maintain export
25 revenues and profits at their current levels, if
5714
1 we accept that as the need, then -- there may be
2 some Manitobans that don't agree with that, but
3 that's where I started from. I said all right, we
4 just accept that's the need, because there isn't
5 any need in a more cogent sense for this dam.
6 There's no way it's needed by Manitobans for their
7 own electrical needs, for example, any time soon.
8 And you don't need, I suppose, to increase or
9 maintain your export revenues either.
10 But if you take that as the need, then
11 I think what the analysis would have shown is that
12 there are different ways that you could do it, and
13 they might be better ways. I think that they
14 might be. That's my hunch, because I think that
15 so many of the benefits of the DSM/distributed
16 generation type of approach would reveal
17 themselves if you did the type of sophisticated
18 portfolio analysis of that kind of a scenario,
19 where you get to see the effect it has on your
20 cash flow and how quickly you can cycle your
21 capital, and the extent you can get that 300 or
22 400 million dollar triangle that opens up on that
23 chart we were looking at, which Wuskwatim can't
24 touch because it can't be built fast enough. And
25 you start to bring all of those things into the
5715
1 quantification of the benefits of, for example, a
2 DSM/DG alternative, then, yes, I think an NFAAT
3 analysis might have very well concluded that
4 Wuskwatim advancement was not the best way to meet
5 the need that has been identified here.
6 MR. SARGEANT: Without oversimplifying
7 all of the work that you've done, your bottom
8 line, at least as I understand it, is that to
9 realize that need to keep up export revenues could
10 be done better by other means than building
11 Wuskwatim.
12 MR. TORRIE: Yes.
13 MR. SARGEANT: Thank you.
14 MR. TORRIE: That's the question that
15 at least should have been explored.
16 MR. ABRA: Dr. Miller, Mr. Torrie, my
17 name is Doug Abra. I'm counsel to the Clean
18 Environment Commission. With me is Jean McLellan
19 who is from Price Waterhouse Coopers and is one of
20 the consultants on the NFAAT issue that's before
21 the Commission.
22 Firstly, Mr. Torrie, I'm not
23 attempting to challenge your qualifications at
24 all, but I do want to ask you some questions
25 related to your experience related to certain
5716
1 aspects. In particular, in your initial filing,
2 you gave a background on your experience and so
3 forth as it relates to DSM, and what roles you
4 had, or at least who you had served with as far as
5 DSM and so on is concerned. But what exactly,
6 sir, have you done in that regard? Have you
7 actually planned DSM programs -- or you've
8 obviously spent a significant amount of time on
9 DSM, but what role have you played in that regard?
10 MR. TORRIE: My direct experience with
11 DSM has been never from inside utility designing
12 programs and never from within a government
13 either, I've been self-employed for my whole life,
14 so as a policy consultant in this particular case
15 and as a technical consultant. So I've done quite
16 a bit of analytical work on DSM, very often as the
17 material on my qualifications indicates, from the
18 perspective of evaluating or assessing a utility
19 or government strategies.
20 I introduced the so-called supply
21 curve concept of costing electricity conservation
22 to Canada. We did the first -- you know, this
23 "cost of save the electricity method" that you see
24 throughout the DSM reports that were done by
25 Manitoba Hydro consultants, I introduced that
5717
1 approach to Canada back in the mid-1980s as a way
2 of trying to bring a more symmetrical approach to
3 comparing demand and supply-side options. So I've
4 been there in terms of my engagement in the issue,
5 but it's been primarily in an analytical mode.
6 MR. ABRA: Okay. What about load
7 forecasting, have you actually done load
8 forecasting yourself, or what experience do you
9 have as far as analyzing load forecasting is
10 concerned? Because one of the basic precepts of
11 your report is the load forecast that Hydro has
12 done.
13 MR. TORRIE: Well, I have a lot of
14 experience constructing quantitative analyses of
15 energy futures. And I'm sorry to not just say
16 load forecasting, but part of the point, I guess,
17 of the perspective that I tried to bring to this
18 is that the load forecasting approach to thinking
19 about the energy future is part of the problem.
20 I have done it, and I have done a lot
21 of work over the years of critical analysis of
22 load forecasting exercises.
23 MR. ABRA: By various utilities?
24 MR. TORRIE: Yes.
25 MR. ABRA: Okay. What about wind
5718
1 generation, wind development and so on?
2 MR. TORRIE: I don't know very much
3 about wind generation. I would not portray myself
4 as an expert on that by any means. I try to keep
5 current of what I need to know to integrate it
6 into bigger energy planning, and scenarios and
7 studies, but --
8 MR. ABRA: We heard evidence from Dr.
9 Higgin yesterday on behalf of CAC/MSOS that
10 because of what he identified as being fairly
11 significant risks with respect to the development
12 of wind, that he didn't think that it was an
13 option that really Hydro should be looking at on
14 its own, as far as alternatives are concerned. Do
15 you agree or disagree with that, or do you not
16 want to comment because you don't have much --
17 MR. TORRIE: I have not reviewed that
18 transcript. Someone did describe in a little bit
19 more detail the point that you're making. And as
20 I understood it, that the risk that he was
21 referring to was the business risk of a large
22 electric utility getting into the wind investment
23 business. It wasn't technical risk.
24 MR. ABRA: No, that's right, yes. In
25 essence, what he was saying was that something
5719
1 should be done by private enterprise as opposed to
2 by a public utility?
3 MR. TORRIE: Right. I don't have a
4 particular perspective on whether it would be
5 better or worse for Manitoba Hydro from a business
6 perspective to get into the wind business or to
7 have someone else do it. And neither do I know
8 whether it would be a more effective way to
9 develop wind power in Manitoba if it were done
10 privately rather than through the public utility.
11 I haven't examined that question.
12 MR. ABRA: Okay. One of the aspects
13 that you didn't touch upon in your report in
14 describing your own experience in qualifications
15 is whether you've actually testified before
16 commissions such as this, or public utilities
17 boards or whatever as an expert and given opinions
18 of the nature that you've given to CEC here?
19 MR. TORRIE: Yes. I've been -- I
20 could provide a list if it would be useful, but
21 I've been an expert witness before administrative
22 tribunals, parliamentary committees, environmental
23 assessment hearings. I mean, I don't do it for a
24 living but I've done more of it than some people,
25 including the select committee on Ontario Hydro
5720
1 affairs on a number of occasions and hearings in
2 the Province of Quebec surrounding the Great Whale
3 proposals.
4 MR. ABRA: So you do have significant
5 background of giving evidence of the nature that
6 you've given to CEC before various, as you say,
7 types of commissions?
8 MR. TORRIE: Yes.
9 MR. ABRA: And committees and public
10 utilities boards and so on?
11 MR. TORRIE: Yes.
12 MR. ABRA: Thank you. And on the
13 issue of the needs for and alternatives, well, not
14 alternatives to but needs for and justification,
15 when you did your analysis, I am assuming from all
16 of your reports and your responses to the IRRs and
17 your evidence here today that you are looking at
18 the needs as far as Hydro alone is concerned? You
19 are looking at it from the perspective of Manitoba
20 Hydro and you haven't considered the involvement
21 of NCN in the joint application to the CEC?
22 MR. TORRIE: That's correct.
23 MR. ABRA: Now, in your various
24 submissions to the Commission, you've used the
25 term "distributed generation" and you've used "DG"
5721
1 I think periodically. But I had thought
2 originally that that was wind. That was what we
3 sort of have concluded. Are we correct or are we
4 wrong? What is distributed generation?
5 MR. TORRIE: Wind can be a form of
6 distributed generation, but distributed generation
7 is a broader term than just one particular type of
8 hardware. It refers to the -- it refers to the
9 scale of the generation as much as it does to the
10 type of technology, because the idea of
11 distributed generation is that you get your power
12 from a network of many, many, many small sources
13 that are evenly distributed on the grid rather
14 than from a small number, or maybe in addition to
15 from a small number of centralized power plants.
16 And the network becomes more like a
17 telecommunications network than a traditional
18 electricity grid in terms of the distribution of
19 the nodes and the lengths and wind power. When
20 it's developed on a relatively small scale is
21 definitely distributed generation.
22 The point, in fact it was made, if I
23 am not mistaken, in this most -- in Exhibit 37,
24 this most recent rebuttal from Manitoba Hydro. It
25 was made that if wind is developed in very large
5722
1 farms, some of the characteristics of distributed
2 generation would no longer be there. Some of them
3 still are because the individual generators, even
4 on a wind farm, are quite small increments of
5 power capacity. And that by itself means that
6 some of the qualities of distributed generation
7 would apply. For example, if one of them fails,
8 it's no big deal.
9 And that's one of the characteristics,
10 one of the advantages of the whole distributed
11 generation concept is that any network will have a
12 higher level of security if it has a greater
13 number of nodes contributing and they are evenly
14 distributed, than a network that has only a small
15 number of supply nodes in it.
16 MR. ABRA: Your original filing, page
17 21 of 21, you said beginning at line 10.
18 "It is also well known that dollar for
19 dollar, DSM investment produces
20 several times more jobs than power
21 plant investment especially when the
22 multiplier effects of the recirculated
23 savings from lower power bills are
24 included in the calculation. Northern
25 and First Nation employment levels
5723
1 achieved by Wuskwatim advancement
2 could be surpassed in a DSM/DG
3 scenario and lead to versatile skills
4 that could form the basis of
5 sustainable economic activities in
6 northern communities."
7 On what basis do you make that
8 statement, sir? Firstly, how is DSM going to
9 assist Manitobans generally economically? And
10 then in particular, how is it going to assist
11 First Nations people such as NCN?
12 MR. TORRIE: Okay. Well, there are
13 two -- there are, as your partitioning of the
14 question suggests, a couple of separate points
15 being made in that passage that you quoted. With
16 respect to the generation of employment per dollar
17 of investment, the size or the number of jobs, if
18 you like, that gets created are related both to
19 the capital intensity, if you like, of that
20 particular activity. And there, as is elaborated
21 in the interrogatory responses, number 16 in the
22 CNF set and number 12 in the CEC set, and also
23 number 12 in the Manitoba Hydro/NCN set, it's
24 fairly well established and has been for some time
25 that you will have more direct jobs created per
5724
1 dollars invested through the types of activities
2 that constitute DSM than you will through the
3 activities that are required to build a power
4 plant.
5 And in fact, investment in the
6 electric power sector is usually just about at the
7 very bottom of the list of any list of industries'
8 effectiveness at creating jobs per dollar
9 invested.
10 But that's not really as big an effect
11 as what can occur when the savings from the
12 reduced energy bills are re-spent in the economy.
13 And I haven't done that. That analysis varies
14 from one place to the next, depending on the
15 particular circumstances, the re-spending effect
16 will be more or less important.
17 And I'm not sure how it will play out
18 here. Maybe somebody has done it. I'm not aware
19 of it. But it will be important, for example, if
20 we had had an NFAAT analysis with the DSM/DG
21 alternative to find and analyze to have a very
22 complete analysis of both the direct and the
23 indirect multiplier effects of the DSM investment
24 strategy.
25 The point about the community
5725
1 development and the northern and Native community
2 development benefits of this type of generation is
3 also elaborated on in the interrogatory responses
4 that I referred to in the first part of -- in the
5 answer to the first part of this question. But
6 the connection between the two parts of the
7 question again is the recirculating of money
8 within the community.
9 And in the years following the first
10 oil price shocks in the 1970s and 1980s, a number
11 of communities sat down and took a look at the
12 amount of money that was leaving their community
13 to buy electricity and to buy fuel and to buy gas,
14 and considered whether or not, if they could
15 implement energy conservation and efficiency
16 programs within their community, whether they
17 couldn't keep more of that money circulating in
18 the community.
19 And out of that initial set of
20 initiatives, there's developed a whole branch of
21 community economic development around the
22 centerpiece of developing a higher level of energy
23 efficiency and self-reliance at the community
24 level.
25 And there is a sub-branch of that
5726
1 which specifically has to do with the many
2 situations where Aboriginal and Native communities
3 have used local energy strategies with an emphasis
4 on DSM and DG type technologies as a lever for
5 community economic development.
6 Beyond that, as we move into the more
7 advanced, what we sometimes call third generation
8 approaches to DSM, and the true community
9 collaborations between utilities and community
10 groups and business groups that characterize
11 advanced approaches to DSM, the effort, and this
12 is not only true of DSM but of many environmental
13 issues as well, the effort that it takes to work
14 together to get high achievability of DSM is a
15 community building effort.
16 And you can see this, for example, in
17 the New England that the NEEP, the New England
18 Energy Efficiency something or other, it's
19 referred to in our interrogatory responses on
20 advance DSM, is that the very nature of the
21 collaborative which is driving the technology is
22 building stronger community bonds among all of the
23 organizations and its constituencies that are
24 participating.
25 So in contrast, the building of mega
5727
1 projects, whether they be hydro dams or nuclear
2 power plants or coal-fired stations, or whatever,
3 tends to bring an extremely large amount of
4 capital investment into a community which, in many
5 cases, is quite small relative to the size of the
6 investment.
7 And so the need for this project has
8 nothing to do with local community needs. In this
9 case, I guess it has to do with the electricity
10 consumption patterns of Minnesotans. And very
11 often, the scale of the undertaking is also out of
12 proportion to the local economy. And very often,
13 after the initial construction is finished,
14 whatever job creation impacts from the
15 construction that might have prevailed suddenly
16 disappear and you can be back down to very low
17 levels of permanent direct employment from the
18 project.
19 And so it doesn't have the same
20 ability to really act as an engine for sustainable
21 community economic development that the DSM/DG
22 alternative can. And that was the point that this
23 was referring to. And there are references in the
24 interrogatory responses that I've mentioned which
25 provide additional supporting documentation of
5728
1 both the employment and the community development
2 benefits of the DSM/DG scenarios.
3 MR. ABRA: All right. Well, I think
4 we all understand that the obvious purpose of DSM
5 is to save people money which in turn they are
6 going to use on something else which, as you've
7 said, is going to have some impact on the economy.
8 I must admit I interpreted your
9 statement to mean that there's going to be more
10 specific jobs arising from DSM than there is from
11 the building of Wuskwatim.
12 Are you saying that there will be or
13 there won't be? And if there will be, will those
14 jobs be in Manitoba?
15 MR. TORRIE: Well, the percentage of
16 jobs from DSM that would be located within the
17 province would probably, I would think almost
18 certainly, be higher than the percentage that's
19 the case with the Wuskwatim investment. But I
20 have not done the analysis to confirm that. But
21 we have done that kind of work in the past.
22 And generally, I mean, the numbers
23 about the per cent of the jobs that stay in the
24 province and in the north are referred to in the
25 interrogatory responses that are referred to again
5729
1 earlier in this discussion we're having.
2 But on the question of whether DSM
3 will create more jobs than Wuskwatim, we don't
4 know how much DSM there's going to be. So I can't
5 -- I couldn't say for sure. But dollar for
6 dollar, no question, you will get more job
7 creation from an investment in DSM than you will
8 from an investment in Wuskwatim.
9 MR. ABRA: In Manitoba?
10 MR. TORRIE: Yes. This is
11 retrofitting houses, this is recommissioning
12 buildings, this is very labour-intensive, at least
13 some aspects of the DSM agenda. And the
14 employment is distributed, not where energy is
15 produced but where it's used. So it's inherently
16 a very even distribution of the employment
17 benefits.
18 DR. MILLER: I wonder if I might
19 supplement Mr. Torrie's response?
20 MR. ABRA: Yes, certainly.
21 DR. MILLER: Certainly one of the
22 commendable features of the Wuskwatim proposal is
23 the partnership with NCN and the joint planning
24 and all of that. And I certainly wouldn't want to
25 detract from it. But what if, as Mr. Torrie was
5730
1 suggesting, the similar levels of investment plus
2 Federal dollars for training, plus Hydro dollars
3 for training, Provincial dollars for training,
4 were to be spent in teaching people to retrofit
5 and build homes? And this could very well start
6 in the north where the question of electrical
7 costs are perhaps a very significant factor. It
8 would improve the quality of the housing stock and
9 create, on a more sustainable and continuous
10 basis, training in trades that would be expected
11 to continue because housing will continue.
12 To get the same effect, Hydro talks
13 about a succession of dams. So although very few
14 people entering the trades will get their papers
15 by the time Wuskwatim is begun, and maybe not by
16 completion, there are the other dams down the
17 road.
18 Well, you only have a certain number
19 of those. But people are always having to upgrade
20 their homes and replace them and build new ones.
21 And so it seems to me that the training and the
22 continuity of jobs is, at least intuitively to me,
23 much more significant with investments in
24 something that goes on even when energy power
25 plants are not being built.
5731
1 MR. ABRA: Well, intuitively, Dr.
2 Miller, you may very well be right. The bottom
3 line is we're talking in terms of $900 million for
4 Wuskwatim. How much DSM can be achieved by that
5 same $900 million? Has there been any analysis
6 done in that regard?
7 MR. TORRIE: That is a beautiful NFAAT
8 question. That's the first question that I would
9 have been looking for the answer to when I picked
10 up those two volumes last spring.
11 MR. ABRA: And you didn't find it?
12 MR. TORRIE: It's not there.
13 MR. ABRA: And you didn't do an
14 analysis of that nature, I gather?
15 MR. TORRIE: I'm trying to remember if
16 we actually -- I think we did do an estimate of
17 the job creation per dollar investment.
18 MR. ABRA: If you did, we didn't see
19 it.
20 MR. TORRIE: I might have backed off
21 because the multiplier effect is so important and
22 I don't know what that would be in Manitoba given
23 the export situation.
24 DR. MILLER: While he's looking for
25 that, we did ask Hydro to provide an answer to
5732
1 that question. And they said, well, we can't
2 because we haven't updated our program which is
3 where the costs are attached to particular
4 measures. So I think it would be the
5 responsibility of Hydro to do that. And as Mr.
6 Torrie says, that should have been part of a NFAAT
7 presentation.
8 MR. SARGEANT: Can I just ask a
9 question following on? Is there a limit to the
10 amount of DSM that can be achieved? I am sure
11 there must be. I mean, if you retrofit every
12 house in Manitoba and --
13 MR. TORRIE: The thing about DSM that
14 makes it a little -- one of the things that makes
15 it different from a supply side resource is there
16 isn't any theoretical limit for starters to it.
17 MR. SARGEANT: There is not?
18 MR. TORRIE: There is a thermal
19 dynamic limit to the efficiency with which
20 electricity can be used and which energy can be
21 used by humans, but we're not even in the same
22 ballpark with that number.
23 What I meant was is that every time
24 somebody has an idea for how something can be done
25 with less electricity, the resource grows. So
5733
1 it's not something that's sitting in the ground
2 and it's not ever going to get any bigger like oil
3 or gas or, for that matter, the flow of water and
4 rivers. It's an information intensive resource.
5 And every time someone has a bright idea, it gets
6 bigger. And every time somebody figures out how
7 to -- well, I'm just repeating myself. So in that
8 sense, it is in a way limitless.
9 Now having said that, there are
10 practical constraints that you will run up against
11 in any area. But again, that number lies well
12 beyond the economic potential identified by
13 Manitoba Hydro and the economic potential lies
14 well behind the achievability target. So it
15 becomes a little bit of an academic point whether
16 the limit is out there because we're not even in
17 its orbit.
18 MR. SARGEANT: Thank you.
19 MR. MAYER: While we're waiting, I
20 have a couple of questions arising out of Mr.
21 Abra's comments. I want to go back to page 21 of
22 21 on your original submission. And I understand
23 it's a different page in the document you gave us
24 today because it's probably page -- no, I think it
25 might be page 21.
5734
1 MR. TORRIE: It's point 21 and it
2 starts on page 21 but it ends on page 22.
3 MR. MAYER: But I'm looking at the
4 second line of point 21. There is no disagreement
5 that DSM/DG wind option represents the lowest
6 environmental impact strategy for meeting end-use
7 service needs. I have a couple of questions
8 arising out of that.
9 Firstly, very obviously there, you
10 have indicated to us that by distributed
11 generation, you mean wind, correct?
12 MR. TORRIE: Yes.
13 MR. MAYER: So we're excluding mini
14 hydro, for example? You're talking only wind when
15 you make that comment?
16 MR. TORRIE: Yes.
17 MR. MAYER: Secondly, where do you
18 arrive at the conclusion that there is no
19 disagreement that DSM and wind represents the
20 lowest environmental impact strategy for meeting
21 end-use service needs? That is not the evidence
22 we have before us. There appears to be some
23 disagreement.
24 MR. TORRIE: Are you referring to the
25 lifecycle analysis?
5735
1 MR. MAYER: I'm referring to a number
2 of things. We have evidence of what a wind farm
3 requires. Firstly, it also requires transmission
4 lines. I'm going to compare it to Wuskwatim
5 project in particular. Wind generators have to be
6 built where there is wind. If that means in the
7 middle of the boreal forest, we've got to take out
8 the boreal forest. I have no idea how you would
9 build a wind farm in a boreal forest without
10 taking out a good chunk of the boreal forest. In
11 any event, you have to take some kind of land out
12 of production to develop wind generation. I'm
13 correct in that; am I not?
14 MR. TORRIE: Yeah, the tower has a
15 footprint.
16 MR. MAYER: And a wind farm has a
17 larger footprint?
18 MR. TORRIE: Yes.
19 MR. MAYER: Larger than one-half a
20 square kilometre, sir?
21 MR. TORRIE: I don't know.
22 MR. MAYER: But then how can you tell
23 us that there is no disagreement that the lowest
24 environmental impact strategy is distributed
25 generation and DSM?
5736
1 MR. TORRIE: Well, Peter wants to
2 comment, but I would just say first of all that
3 the reason that I said there was no disagreement
4 was that if you read the language -- and I guess
5 what I really meant was that Manitoba Hydro has
6 not challenged that because if you read their,
7 unless they've changed their position, when you
8 read their scoping chapter from the NFAAT volume,
9 they are pretty clear on this, that wind is --
10 they come to the conclusion that wind is at least
11 no worse than Wuskwatim.
12 And you may disagree with them, in
13 which case I'm wrong to say there's no
14 disagreement. And I certainly could understand,
15 based on the questions you were just asking, why
16 you might.
17 But the other comment I would make is
18 that if you really want to look, I mean, at the
19 environmental -- compare the environmental impact
20 of Wuskwatim with wind, surely it's not only, or
21 even perhaps primarily about the square metres of
22 surface area that it takes for the wind farm
23 versus the square metres of flooding that would be
24 behind the dam.
25
5737
1 I mean I'm not here as an environmental
2 impact expert today. But from what I do know about
3 it, that would not be a sufficient metric to come to
4 any conclusion about which of the two options was
5 environmentally preferable.
6 MR. MAYER: I recognize that it is only
7 an example, Mr. Torrie, that I gave you. But when
8 somebody opens with a bald statement, there is no
9 disagreement that such is an issue. I learned a long
10 time ago that's where you start your challenge.
11 MR. TORRIE: Thank you. I will take that
12 into consideration and I'll program my Word Processor
13 not to let me do that again.
14 THE CHAIRMAN: Mr. Miller.
15 DR. MILLER: If I might respond to the
16 same question. I believe the Pembina Study indicates
17 a marginally higher greenhouse gas emissions from a
18 wind farm per kilowatt hour but a substantially lower
19 land use footprint than the hydroelectric end power,
20 because I guess primarily of the transmission line.
21 And the second one is a wind farm, as we
22 heard -- we did hear evidence that you plow around
23 it. And I guess the third point would be the wind
24 potential is in the prairie areas, not in the forest
25 areas. So we've heard evidence of all of that I
5738
1 think.
2 So I'd have to treat your question as
3 more hypothetical than based on, you know, the
4 instantiation of wind farms as they have been
5 proposed in this hearing.
6 MR. MAYER: But Dr. Miller, all wind
7 farms need not necessarily be built on prairies and I
8 understand Hydro is still studying it as a number of
9 monitoring areas that don't all -- their initial
10 results are that somewhere down in Southeastern
11 Manitoba, which isn't by the way all prairie, at
12 least not some of the stuff I've seen having been
13 down there a few times, is not, by definition, built
14 on farmland, is it?
15 DR. MILLER: Not by definition, no.
16 MR. MAYER: I think I made the point. I
17 don't wish to pursue it.
18 DR. MILLER: Yeah, the theoretical point.
19 THE CHAIRMAN: Mr. Abra.
20 MR. ABRA: Thank you, Mr. Chair. I'd
21 like to go back just to the quotation of page 21 of
22 your brief, just carrying on the balance of that
23 paragraph.
24 "The DSM/DG technologies are also
25 sunrise technologies. There is a fast
5739
1 growing global demand for
2 environmentally sustainable solutions
3 for providing energy services. And
4 those economies and societies that
5 excel in this field will enjoy a
6 significant and competitive
7 advantage."
8 What do you mean by that statement, sir?
9 MR. TORRIE: Well, I am not sure which
10 part of that is not clear. The reason that the
11 competitive advantage comes to those economies that
12 succeed in finding solutions for both the technology
13 and the deployment in financing and institutional
14 solutions for mobilizing DSM and DG technologies is
15 that they will then be able to sell those solutions
16 to those economies which are not as far along the
17 curve.
18 We have seen this, for example, with the
19 automobile and the way that the more efficient and in
20 some ways more user-friendly Japanese designed
21 automobiles of the 1970s and eighties were successful
22 in achieving a significant international competitive
23 edge for the Japanese economy. And we are beginning
24 to see a similar phenomenon in the wind energy
25 certainly.
5740
1 I mean tiny little Denmark is a world
2 power in this industry just because they got there
3 first and they figured it out some time ago. And
4 Germany is coming on very strong as are other
5 countries. But the wind industry is experiencing
6 explosive growth and the people that got in -- the
7 economies that got in early are going to clean up.
8 So we can go on. There are other
9 examples. And this has been I think recognized even
10 at the highest levels of national, industrial and
11 competitive policy in some countries. The U.K. right
12 now, for example, has identified the pursuit of lower
13 greenhouse gas emissions as a key economic and
14 competitive issue for the U.K. in a positive way.
15 They see being on the leading edge of knowing how to
16 do that as being one of the keys to being an
17 economically -- an economic winner, if you like, in
18 the 21st century and they are quite serious about it.
19 So that's what I'm talking about, that
20 this is a fast growing field. And those that get in
21 early will enjoy competitive advantage. I don't know
22 if that's the part you wanted me to --
23 MR. ABRA: No, that's fine.
24 DR. MILLER: I can give a brief local
25 example on the DSM side, Loewen Windows. You know,
5741
1 we have manufacturers who produce some of the most
2 energy efficient windows available and I believe they
3 export a significant amount of those. So that would
4 be on the DSM side.
5 MR. TORRIE: It has to be said, and this
6 is something that everybody in Canada who worries
7 about these things needs to be aware of, that there
8 has always been a down side to cheap energy which is
9 you can fall behind what's going on on the demand
10 side. And this is something that many of our points
11 have addressed with respect to electricity in
12 Manitoba.
13 MR. ABRA: Sir, in the interrogatory
14 response CAC/MSOS/TREE/RCM-1 NFAAT-3, you had the
15 diagram Wuskwatim Advancement with Adjusted Basic
16 Forecast. And then you, this morning, put a
17 variation of that diagram on the screen taking into
18 consideration the information that you got from
19 Hydro's response where you took into consideration
20 the 400 megawatts from DSM. I wonder if you can put
21 that diagram back up on the screen. I want the one
22 that shows going above the line. That's right, the
23 10,000 gigawatt hours and showing --
24 MR. TORRIE: This is it here.
25 MR. ABRA: That's the one. Now, you
5742
1 have, as you said, done an adjustment to that
2 particular diagram as a result of information that
3 you received from Hydro in their response. But the
4 way I understand that diagram is that the 10,000
5 gigawatt hours is basically the capacity that can be
6 exported based upon the tie-line capability; I am
7 correct in that?
8 MR. TORRIE: Well, you're certainly in
9 agreement with me, 10,500 actually.
10 MR. ABRA: Okay.
11 MR. TORRIE: We might both be wrong,
12 though.
13 MR. ABRA: But that's what you understand
14 it to be?
15 MR. TORRIE: That's what I understand,
16 yes.
17 MR. ABRA: Is that as a result of
18 information that you received from the filing and so
19 on?
20 MR. TORRIE: Yes.
21 MR. ABRA: Okay. Now, the way I
22 understand that document is that effectively what
23 you're saying is that if Hydro proceeds with
24 Wuskwatim and its 200 megawatts and then proceeds
25 with its projection of 200 or at least of DSM and
5743
1 proceeds with its wind generation, that in fact, they
2 may have more power than they are capable of
3 exporting; am I correct in that? Is that the purpose
4 of that diagram?
5 MR. TORRIE: That's one of the purposes.
6 May I just say something though?
7 MR. ABRA: Certainly.
8 MR. TORRIE: About what some of the other
9 reasons for doing this are?
10 MR. ABRA: But am I correct in that
11 regard, that you're saying that Hydro may very well
12 have more power available to it in the years 2007
13 through 2014 than in fact they are capable of
14 exporting?
15 MR. TORRIE: Yes. And that is also my
16 understanding of the reason why this type of diagram
17 was used in the first place in the NFAAT evidence
18 presented by Manitoba Hydro is because of the way it
19 illustrates precisely that point. And they use it in
20 their case to show the effects of advancing Conawapa,
21 for example, instead of Wuskwatim, is to place a
22 great deal of generation capacity above that line.
23 MR. ABRA: Okay.
24 MR. TORRIE: Above that 10,500 gigawatt
25 hour line. Or you may very well still be able to
5744
1 sell it, but where you start to get into questions
2 about how much you could sell it for.
3 MR. ABRA: Okay. But you said there was
4 other purposes of the diagram other than that point?
5 MR. TORRIE: Well, the primary purpose of
6 all of the series of diagrams and all of this work
7 was to try and actually draw a picture of what an
8 NFAAT case would have looked like. And what I would
9 like to avoid is that the TREE/RCM NFAAT "Case" that
10 we've thrown together for the sake of illustrating
11 how this kind of thing would look if it had been done
12 shouldn't then become the subject of a determination
13 of the NFAAT question at this hearing.
14 In other words, this is, to a very large
15 extent, illustrative work. Nevertheless, it's rooted
16 in Manitoba Hydro's numbers. We've tried to develop
17 NFAAT scenarios which are within the realm of
18 plausibility, and therefore, ought to have been more
19 thoroughly analyzed and considered.
20 This adjustment, I should also add, that
21 we're looking at is not a full scale response to the
22 criticism that is implied in the rebuttal document in
23 which Manitoba Hydro points out that the actual sales
24 in calendar year 2003 are quite a bit higher than
25 they were forecasting back in the 2002 forecast. So
5745
1 I would like to take another look at that. But I
2 don't think the resources will be there to do it.
3 So all I did here was adjust the existing
4 resources that are available after meeting the basic
5 forecast down by 400 gigawatt hours because I have a
6 hunch that that's kind of the range that we'd be
7 looking at. But really what I would need to do to
8 properly respond to this point would be to
9 recalibrate the whole scenario and I have not done
10 that.
11 MR. ABRA: You've made comments of that
12 nature throughout much of your evidence today that
13 you just haven't had the opportunity to do this and
14 so on. Is it your position that the Commission
15 doesn't have enough information about alternatives to
16 make recommendations at this juncture?
17 MR. TORRIE: Yes.
18 MR. ABRA: For the reasons that you've
19 given?
20 MR. TORRIE: Yes.
21 MR. ABRA: Now, I wonder if you could put
22 up on the screen that document that you had up
23 earlier, which in particular is figure 13.6 from
24 CNF/TREE/RCM-1 NFAAT-13.
25 That may not have been the one you put up
5746
1 earlier, I'm sorry, but that's the one I'd like you
2 to put up. If you have it on your computer. If you
3 don't, then the members of Commission actually have
4 it with them.
5 MR. TORRIE: Is it 13.2 or 13 --
6 MR. ABRA: 13.6 is the one that --
7 MR. TORRIE: Is there a particular reason
8 you're selecting that one?
9 MR. ABRA: Well, we could do any of them.
10 And basically I want you to explain exactly what the
11 diagrams represent. The reason we chose that
12 particular one is because it's the most
13 representative of what Hydro in fact is planning,
14 that being two times DSM, 250 megawatts of wind with
15 Wuskwatim on line as well.
16 MR. TORRIE: Right. I might have it. I
17 didn't plan to use it.
18 MR. ABRA: If you don't, don't worry
19 about it because the members of the panel have it
20 with them.
21 MR. TORRIE: Here it is. Is that the
22 one?
23 MR. ABRA: Yes, that's right. Now, I
24 wonder if you could just go through that diagram and
25 explain exactly what it represents? And then of
5747
1 course we can use that as a basis for analyzing the
2 rest of them that you've given to us.
3 MR. TORRIE: Well, the large block at the
4 bottom of the diagram which is blue on the slide
5 that's being presented and which is sort of a light
6 shaded colour in the black and white copies in the
7 briefing material, that represents the gigawatt hours
8 per year that are available for exporting, or
9 anything else I suppose, after meeting the basic
10 forecast prediction of electricity demand in Manitoba
11 year by year.
12 And in this particular diagram, which is
13 13.6 from TREE/RCM, a response to CNF's question
14 number 13, the blue block or the large block
15 represents how much will be left over after meeting
16 our adjusted version of the basic forecast.
17 If instead we had kept Manitoba Hydro's
18 version of the basic forecast, the blue bar would
19 be -- the blue block would not be as high. The
20 overshoot above the 10,500 gigawatt hour line would
21 not be as great, and in some cases, it would fall
22 below the line depending on the scenario.
23 And it's the same block which is on the
24 base of Figure 5.5 in Volume 1 of the NFAAT evidence.
25 It's calculated exactly the same way. I used the
5748
1 same tables of numbers that Manitoba Hydro uses but I
2 used my adjusted forecast. So it includes whatever
3 DSM has embedded in the forecast. But it doesn't
4 include all of the DSM which is external to the
5 forecast and as a result of the incentive in the
6 targeted programs that you've heard so much about.
7 And that is represented in the slide by a yellow
8 sliver of gigawatt hours.
9 And in this particular diagram, we've
10 used the phrase "2 X DSM." And what we mean by that,
11 in the context of all of our slides is two times the
12 amount of DSM which is in the current Manitoba Hydro
13 PowerSmart program.
14 MR. ABRA: Right?
15 MR. TORRIE: So it's 670 gigawatt hours
16 by 2018 times -- yeah, it's 670 gigawatt hours by
17 2018. The two times level, by my calculations, would
18 be about a third of what Manitoba Hydro has
19 identified as the economic potential. It only
20 represents about 27 per cent of what we came out with
21 for the DSM economic potential. So the two times DSM
22 number doesn't represent as vigorous an achievability
23 accomplishment in our estimate of economic potential
24 as it does in Manitoba Hydro's, if you see what I
25 mean.
5749
1 And the green sliver is fairly
2 straightforward. That is the contribution that will
3 be available from 250 megawatts of wind power
4 assuming a 35 per cent load factor.
5 And all of these diagrams work with that
6 basic type of concept. And it's exactly the same
7 technique that's used in Volume 1 of the NFAAT. And
8 it's a way of illustrating other ways of meeting what
9 we said the need was, which how could you maintain
10 export and how could you maintain export revenues and
11 profits?
12 And I interpreted that for the sake of
13 having a manageable analysis and not having to run
14 the splash model and everything else, I interpreted
15 that as meaning staying above the 10,500 gigawatt
16 hour line. I think that is a shorthand way of
17 stating what the Wuskwatim advancement proposal is
18 all about.
19 MR. ABRA: Do I understand you to be, in
20 essence, saying that you're not disputing the
21 ultimate need for Wuskwatim but it's the advancement
22 that you object to, that it's simply not necessary at
23 the present time?
24 MR. TORRIE: I'm not objecting to the
25 advancement. I'm not advocating or objecting. It
5750
1 probably does -- obviously my perspective comes out
2 in the language I use. I don't think that the --
3 from what my analysis shows me, I just don't think
4 that the case has been made at all that advancing
5 Wuskwatim is the best alternative for maintaining
6 export revenues and profits between now and 2020. I
7 remain unconvinced of that after having reviewed the
8 NFAAT evidence.
9 MR. ABRA: Well then that leads really to
10 my last question. What recommendations would you
11 make to the Commission or what recommendations do you
12 think they should be making to the Minister in that
13 regard?
14 MR. TORRIE: Well, it's obviously the
15 only question that really matters at the end of the
16 day at this hearing I suppose. But it's also one
17 that's pretty scary because you have got a lot of
18 momentum, it seems to me, behind this proposal. You
19 know, there's $50 million spent before we even start
20 to sit down and talk about it. So the pressure, as I
21 understand it, to proceed must be quite high.
22 MR. MAYER: Not on us.
23 MR. TORRIE: Well, I don't mean that in
24 the narrow sense of the word. But if you accept the
25 central argument that there is a triangle of lost
5751
1 opportunity that's going to start opening up between
2 the export market and the amount of power that
3 Manitoba Hydro will have available for it, the peak,
4 the on-peak market, and that that will have
5 accumulated to some $300 or $400 million by 2009 in
6 the absence of a successful effort to close that gap,
7 then as Manitobans, you are going to feel some
8 pressure because I would like to say send them back.
9 Make them do an NFAAT analysis. But that's another
10 year delay right there.
11 And so I can certainly understand why you
12 would be reluctant, not because somebody is picking
13 up the phone and bugging you but because you feel
14 responsibility not to delay something that could have
15 significant economic advantages for the people of
16 Manitoba.
17 So on the other hand, it's also possible
18 that the alternatives that didn't get identified
19 would reveal even better ways forward than spending
20 the next billion dollars on this dam. And you're
21 going to have to make your decision without knowing
22 that unless you send Hydro back to do a proper
23 portfolio analysis which I think would take them six
24 months. You know, I don't really know how long it
25 would take them. They are amazing. There's a lot of
5752
1 them and they are really smart once they put their
2 mind to something but it's a big job.
3 So the most difficult thing is weighing
4 that trade-off. And I don't feel confident to know
5 all of the factors that you have to weigh in your
6 position in order to know what the best
7 recommendation for you would be.
8 From a pedantic point of view, and not
9 worrying at all about another delay, I would say send
10 them back, make them get it right because the stakes
11 are going to be a lot higher next time if there is a
12 next time. And you don't want the learning curve to
13 be on the next project.
14 MR. ABRA: That's in essence the point
15 that I think Dr., and I'm not trying to put words in
16 anybody's mouth, but the way I understood Dr. Higgin
17 and Mr. Harper's testimony yesterday or their
18 recommendation was that they, in essence, were not
19 recommending against this particular project but were
20 basically saying that before you come back with
21 another project in the future, you should do an awful
22 lot more homework.
23 Are you in essence saying the same thing
24 or you think it should be delayed even for this one
25 to be studied more?
5753
1 MR. TORRIE: I certainly agree with that
2 statement as far as it goes. I'm not sure that this
3 isn't the project where the portfolio analysis and
4 the full scale NFAAT analysis shouldn't be put
5 together. But I can only repeat what I said a moment
6 ago. If it were purely a matter of taking a narrow
7 almost legalistic approach to the situation and I was
8 sitting in judgment of this evidence, I would say you
9 haven't complied with the requirement to identify and
10 assess alternative ways of meeting the need. Go back
11 and do it.
12 So that's what I would recommend if this
13 was a court or something and to heck with the real
14 world consequences. But I'm just saying that I'm
15 sensitive to the fact that you are in a position and
16 I'm only speaking here personally. Peter is probably
17 going to want to come on and he's the one who
18 probably should be answering this really because
19 essentially you're asking for a judgment call that is
20 beyond the scope of what the analysis shows.
21 The analysis, in my view, shows that the
22 NFAAT case has not been properly done and I think
23 that it makes your decision a lot riskier.
24 MR. MAYER: Peter will get his chance in
25 summation in argument.
5754
1 DR. MILLER: All right.
2 MR. ABRA: Dr. Miller, Mr. Torrie, thank
3 you very much. That completes my questions. Thank
4 you for your help.
5 THE CHAIRMAN: Thank you, gentlemen. We
6 will adjourn for lunch and be back at quarter after
7 one.
8
9 (PROCEEDINGS RECESSED AT 12:16 P.M.
10 AND RECONVENED AT 1:00 P.M.)
11
12
13 THE CHAIRMAN: All right. Ladies and
14 gentlemen, we will carry on with the questioning
15 of the witness. At 3:00 o'clock we will have to
16 make it a break and go to some of the
17 presentations that are scheduled for this
18 afternoon, and come back, if we are not finished,
19 towards the latter part of the afternoon to finish
20 or proceed with the questioning.
21 That having been said, Mr. Williams,
22 would you get going?
23 MR. WILLIAMS: That was rather sharp,
24 Mr. Chairman. I will get going.
25 I did want to advise you that back
5755
1 over checking me out again is Ms. Gloria Desorcy
2 from the Consumers Association. She is back
3 listening with great interest.
4 I did have a couple of thank you's
5 before we started out. First, I wanted to thank
6 both Mr. Torrie and Mr. Abra, because thanks to
7 their fine work this morning, my cross-examination
8 notes are considerably reduced.
9 Secondly, I did want to, on behalf of
10 my clients, extend their appreciation, both to
11 you, Dr. Miller and to Mr. Torrie, because they
12 value the input that your point of view has
13 brought to this proceeding. It has helped them in
14 developing theirs, and so they look forward to
15 seeing you at the PUB hearing in a couple of weeks
16 as well.
17 Mr. Torrie, you provided today a
18 revised graph dealing with available resources
19 adjusted by 400 GWh. I wonder if you could do my
20 clients the service of providing them with, number
21 1, a copy of that graph; and number 2, the numbers
22 underlying that graph in terms of available
23 resources, and by that I mean the annual values
24 used for resources available? Would that be
25 possible?
5756
1 MR. TORRIE: That is possible. There
2 isn't much to it that differs from the one that it
3 is a perturbation of. And I am not very happy
4 with -- I wasn't even going to do it, but I wanted
5 to try and illustrate what the magnitude of a 400
6 gigawatt offset would look like in terms of the
7 overall balance. And the reason that I had picked
8 400 was, I had spent quite a bit of time going
9 back and looking at the 2002 load forecasts, the
10 2003. I know this is way beyond what your
11 question was, and the short answer is, yes, so
12 maybe I should leave it at that. I just wanted to
13 say that this is not an adequate response to what
14 I would like to be able to do on this issue of the
15 base year.
16
17 (UNDERTAKING TREE-RCM-84: Provide copy of graph
18 and numbers underlying graph in terms of available
19 resources)
20
21 MR. WILLIAMS: I understand that, Mr.
22 Torrie, but I do appreciate that comment.
23 Would it also be possible, I am not
24 sure it is on the record, in terms of TREE figure,
25 from interrogatories for response CNF/TREE 13,
5757
1 would it also be possible to get the underlying
2 values for resources available for that one as
3 well?
4 MR. TORRIE: Yes.
5 MR. WILLIAMS: That would help with
6 the comparison.
7 MR. TORRIE: They are all coming out
8 of a spreadsheet, so it is not an onerous task at
9 all.
10 MR. WILLIAMS: I appreciate that.
11
12 (UNDERTAKING # TREE-RCM-85: Provide underlying
13 values for resources available for figure
14 TREE/RCM/CNF 13.1)
15
16 DR. MILLER: Which one is that?
17 MR. WILLIAMS: Dr. Miller, your
18 question was which figure, and I am speaking to
19 figure TREE/RCM/CNF 13.1, which is the first one
20 in that interrogatory response. It is titled
21 "Wuskwatim Advancement with Adjusted Basic
22 Forecast."
23 Mr. Torrie, moving on, I thought in
24 your comments this morning I heard echoes of the
25 comments of Mr. Harper yesterday, in terms of the
5758
1 need for an alternative analysis presented by
2 Hydro. And one of the statements that you made
3 was kind of looking forward, and you said that
4 type of approach is not going to be good enough as
5 we look forward. And by that I took you to mean
6 that whatever the outcome of this proceeding, you
7 would be looking for some recommendations from the
8 Commission in terms of how a need for an
9 alternative analysis should be properly
10 constructed, in your view, in future proceedings,
11 regardless of the outcome of this hearing. Would
12 that be right?
13 MR. TORRIE: Yes.
14 MR. WILLIAMS: I know it is kind of
15 spread through your interrogatory responses, but I
16 thought it might be helpful for my client's final
17 recommendations to get a sense of how you might
18 approach that analysis. And just for your
19 reference, and I don't think that you need to turn
20 to it, but I know in your response to CEC
21 interrogatory 10, you say the scenarios presented
22 in CNF 13 constitute the type of alternatives to
23 Wuskwatim advancement that should have been, and
24 still should be identified and analyzed by
25 Manitoba Hydro with respect to their overall rate
5759
1 and financial impacts, risk factors, and other
2 costs and benefits.
3 I wonder if I could get you to
4 discuss, first of all, what kind of economic
5 analysis you think should be done, once you have
6 constructed these scenarios or portfolios, to
7 determine, in terms of determining its return.
8 For example, would you recommend an approach like
9 Hydro does in terms of internal rate of return, or
10 how would you do that? Once you have constructed
11 the scenarios, what is your approach in terms of
12 economic analysis?
13 MR. TORRIE: I think that a lot of it
14 would be very similar to the type of cash flow
15 analysis, internal rate of return analysis,
16 investment scheduling analysis, that was carried
17 out for the various perturbations of the Wuskwatim
18 advancement proposal and the sensitivity analysis.
19 One would want to see the alternatives integrated
20 into that same framework that is represented in
21 all of those tables and tables of numbers in the,
22 I believe it is attachment 6 in volume 1 of the
23 NFAAT analysis.
24 I don't think there is anything
25 particularly novel about the qualitative type of
5760
1 analysis that those options would be, or those
2 scenarios and those alternative ways of meeting
3 the need would be subjected to. It is important
4 to look carefully at the overall impact on
5 corporate finances of the DSM/DG scenario, because
6 it will be somewhat different from, quite
7 qualitatively different from the Wuskwatim pattern
8 in so far as the investments start to pay back
9 much quicker, they are much more -- they are
10 grainier and more distributed, so to speak, and
11 they have a different type of risk associated with
12 them than the one egg in one basket approach that
13 tends to characterize the supply side.
14 We have touched earlier today also on
15 the economic and social and employment multipliers
16 and benefits of the elements that would be in
17 different packages for meeting the need that
18 Wuskwatim advancement has been proposed to meet.
19 Those would also be important things to include in
20 a full work-up of the relative merits of the
21 different ways of meeting that need.
22 MR. WILLIAMS: You mentioned corporate
23 finances, and presumably you would be looking at
24 its impact on the corporation's ability to borrow
25 and issues like its creditworthiness as well?
5761
1 MR. TORRIE: Yes.
2 MR. WILLIAMS: And also the rate
3 impacts on customers, that would be another aspect
4 of the financial --
5 MR. TORRIE: Yes, I mentioned that in
6 the initial summary. The rate impacts on
7 customers are quite important, and so is the
8 context in which that analysis takes place,
9 because one of the hallmarks of a services
10 oriented approach to energy is, or a demand
11 oriented approach is that the shift, including the
12 shift in the business strategy and the business
13 planning, moves from the kilowatt hour over to the
14 service being provided. And that is an easy thing
15 to say, it is even a relatively easy thing to tell
16 a utility to do by changing their mandate or
17 mission statement, but it is a very, very
18 difficult transition to actually effect in an
19 organization that, you know, just spent 100 years
20 in the business of making and selling kilowatt
21 hours, and designing its business strategies
22 around the cents per kilowatt hour that they can
23 get for that commodity.
24 So the whole analysis of rate impacts
25 is not just a question of cut and dried
5762
1 arithmetic, but a reassessment of how you can get
2 the economic return, that we know is there from
3 the DSM investments, returning to the utility at a
4 level that allows them to get to the higher
5 achievability levels that we know are possible,
6 but which could result and would result in
7 pressure on the price of electricity in the
8 Province.
9 MR. WILLIAMS: Thank you for that
10 answer, Mr. Torrie.
11 Moving to a bit of a different
12 subject, and again you don't need to turn to it,
13 but you certainly, in your direct evidence and
14 also in response to questions from Mr. Abra,
15 referred to your work in the late '80's and early
16 '90's in terms of Ontario Hydro's demand supply
17 plan. Again, I have the reference here if you
18 require me to provide it, but I just wanted to get
19 from you a sense of the magnitude of the capital
20 programs that were involved in that review? And I
21 am just going to refer to Torrie Smith &
22 Associates Sustainable Development and Electric
23 Power Plan, which is a very good document from
24 1995.
25 As I understand it, in the context of
5763
1 that hearing, Ontario Hydro was seeking specific
2 approval for, among other things, two CANDU
3 reactors of 3,524 megawatts in terms of nuclear
4 generating stations; is that about right?
5 MR. TORRIE: It is actually eight
6 reactors located in two four unit groupings.
7 MR. WILLIAMS: Okay, four 881 megawatt
8 reactors.
9 MR. TORRIE: And that was one option.
10 There were other options that included even larger
11 nuclear components.
12 MR. WILLIAMS: And another element of
13 that analysis would be the installation of 2,000
14 megawatts in terms of hydraulic generating
15 facilities; would that also be correct, sir?
16 MR. TORRIE: If you are quoting from a
17 report that I wrote, it must be true.
18 MR. WILLIAMS: I certainly have the
19 references here, if you require them.
20 MR. TORRIE: No, that sounds about
21 right. There wasn't just one set of numbers on
22 the table, it was a large integrated resource
23 strategy for Ontario Hydro that spanned a period
24 of I think 30 years, and was years and years in
25 the making. It wasn't just a proposal for one
5764
1 project, it was a future vision for the utility.
2 MR. WILLIAMS: Exactly, and also, if
3 you will accept, again subject to check, also
4 being considered was the installation of
5 5,668 megawatts of capacity in the form of large
6 combustion turbine units. Would you accept that,
7 subject to check?
8 MR. TORRIE: Yes, sure. It was big.
9 MR. WILLIAMS: You also mentioned in
10 your direct, and I believe in cross, your work on
11 Great Whale. And if I try to get a scope of the
12 size of this, again going to that reliable source,
13 Torrie Smith & Associates, your analysis of the
14 project of --
15 MR. TORRIE: Where did you find those
16 things?
17 MR. WILLIAMS: It took a lot of
18 digging. But just to get -- and they are good
19 documents --
20 MR. TORRIE: Thank you.
21 MR. WILLIAMS: -- very helpful. My
22 understanding of Great Whale was that Hydro was
23 planning to build a hydroelectric generating
24 capacity in the Grande-Riviere de Baleine, I guess
25 the whale, of 3,212 megawatts. Would that be
5765
1 about right, sir?
2 MR. TORRIE: That sounds right.
3 MR. WILLIAMS: And that was a project
4 consisting of three generating stations,
5 associated river diversions, reservoirs, et
6 cetera. So it was a pretty mega -- it put the
7 mega in the word mega project?
8 MR. TORRIE: Giga projects even.
9 MR. WILLIAMS: And the third one, and
10 it wasn't referenced in your evidence, but I guess
11 one of the other contributions that you made in
12 other regulatory proceedings related to the Lower
13 Churchill hydroelectric project in Labrador, and
14 again going to your excellent report on
15 electricity conservation and efficiency potential,
16 it sounds like that was a project of about
17 3,088 megawatts in terms of capacity in totality.
18 Does that sound right? There were two facilities,
19 one at Gull Island and another one at Muskrat
20 Falls.
21 MR. TORRIE: If you add them together,
22 I guess it was in that range.
23 MR. WILLIAMS: That would be again
24 what you call a giga project instead of -- you
25 will agree with me that certainly Wuskwatim is a
5766
1 big project, but relative in scale to those ones,
2 it is not nearly of that magnitude economically;
3 would that be fair?
4 MR. TORRIE: Well, it certainly is a
5 smaller dam. It's size economically I guess
6 depends on the economy that it is in.
7 MR. WILLIAMS: Well, Churchill River,
8 if memory serves me right, was about an $11
9 billion project in the Province of Newfoundland,
10 and that was in 1990 dollars. So you would
11 compare that to Wuskwatim, which is in a
12 comparable size or perhaps a bit bigger.
13 MR. TORRIE: If you are trying to
14 establish that Wuskwatim is smaller than those,
15 there is no disagreement from me. But in terms of
16 how big a particular project is relative to the
17 economy that it is situated in, that is not as
18 straight forward a question. And while it is true
19 that the Churchill Falls project on the surface
20 might appear to be in Newfoundland and Labrador,
21 from an electric utility system's point of view,
22 it is in the Quebec/New England world, and it
23 represented an increment in that whole system all
24 of the way down to New York, or it would have if
25 it had gone forward, or will if it some day does.
5767
1 That is the only thing that I would caution.
2 MR. WILLIAMS: And that is a helpful
3 context, I appreciate that.
4 I did want to turn just very briefly
5 to a last issue, and I am sure to the shock of
6 both Mr. Mayer and Sargeant, I will be
7 considerably under my time estimate. It is a rare
8 event, Mr. Torrie, so we should applaud it.
9 MR. TORRIE: My next answer is going
10 to be at least half an hour long.
11 MR. WILLIAMS: I was going to say, be
12 nice to me on this one.
13 My understanding is that certainly in
14 terms of the screen that Manitoba Hydro used, in
15 the range of 6 cents for its CCE calculation, you
16 suggested that didn't capture the full benefits of
17 DSM, and that you used as a screen, for at least
18 part of your analysis in terms of the consultant's
19 DSM report, a figure of 8 cents, which you
20 consider to be a partial reflection of the
21 benefits not captured in the Hydro figure; is that
22 right?
23 MR. TORRIE: Yes.
24 MR. WILLIAMS: Perhaps you could, for
25 my benefit, turn to -- I just want to go to CEC,
5768
1 your response to CEC interrogatory 5, and in
2 particular to page 2 of that one?
3 MR. TORRIE: My number 5 in that set
4 is just a referral to other answers.
5 MR. WILLIAMS: Excuse me, I misspoke,
6 CNF 5, my apologies.
7 MR. TORRIE: Okay.
8 MR. WILLIAMS: At least in my copy on
9 the top right-hand side, you discuss limits on the
10 CEC measure, and you -- this is a first full
11 paragraph -- and you identify what I take to be
12 three limits. Namely, that it does not capture
13 any of the benefits to the end user beyond the
14 financial value of the kilowatt hours saving, or
15 to any of the system-wide benefits of increased
16 DSM, or three, any of the social and environmental
17 benefits of DSM. Did I summarize that fairly
18 accurately, sir?
19 MR. TORRIE: Well, you left out the
20 parenthesis on the second point which are maybe
21 worth stating. Yes, it leaves out system-wide
22 benefits unless they are captured by the original
23 method that was used to come up with the 6.15
24 cents, which was not a simple method, as you know.
25 There was a simulation that did capture some of
5769
1 the system effects of the DSM increment, as I
2 understand it.
3 MR. WILLIAMS: For clarification of my
4 analysts, and for my clients as well, we recognize
5 that the 8 cent figure that you use, it is not
6 kind of a, you know, kind of a -- it is a rough
7 number, an attempt to capture the partial
8 benefits -- I don't mean rough in a pejorative
9 term, just that it is an approximation. I guess
10 what I was asking is, within that kind of
11 additional 1.85 cents, does it capture all three
12 of the elements that are identified, or is it an
13 attempt to at least try and capture those three
14 elements, or what does it try and capture?
15 MR. TORRIE: I don't think that there
16 is any way -- I don't think that we know really,
17 because we are talking about environmental
18 externalities, for one thing, and because some of
19 the social and environmental benefits are very
20 difficult to quantify. And some of the other
21 benefits that relate to the easing of risk, for
22 example, from a program that emphasized this
23 stuff, you wouldn't be able to really see those
24 unless you did a full scale portfolio assessment
25 of an investment program. And then you might find
5770
1 out, boy, this stuff is actually worth a premium
2 to us. So I think that -- and in fact, you know,
3 it didn't make that much difference. We didn't
4 really do a very rigorous or thorough examination
5 for technologies between 6 and 8 cents, that were
6 outside of the consultant studies themselves. And
7 going up to 8 cents doesn't add a whole lot in, as
8 you may know. The data bases for this kind of
9 thing are kind of funny, because they are more
10 related to what the going price is than what the
11 technological possibilities are.
12 So I think, to be honest, what we were
13 trying to do here was simply indicate that it may
14 look like using the cost of saved electricity is a
15 move that suddenly puts supply and demand on an
16 equal and symmetrical footing for this kind of
17 analysis.
18 Like I said earlier, I did this before
19 anyone else in Canada, so here I am sort of
20 offering some observations about the shortcomings
21 of a method that I have also been a great advocate
22 for, because it gives you a way of assessing
23 demand side investments opportunities in a way
24 that gets them into cents per kilowatt hours. But
25 at the same time, thinking back to Dr. Miller's
5771
1 opening comments and the types of values that the
2 clients that I have in this job hold, and also
3 thinking to the synergistic and unexpected
4 benefits that always seem to flow from DSM
5 investments, we just felt it was important to
6 point out that you are not actually getting all
7 that this is worth by picking a number that is
8 that cut and dried.
9 MR. WILLIAMS: I appreciate that and
10 that is a helpful answer. If I am trying to get
11 my head around this, the kind of growth from 6.15
12 to 8 cents, that would be representative of the
13 kind of three values that you don't feel were
14 appropriately captured in the simple 6.15?
15 MR. TORRIE: Yes.
16 MR. WILLIAMS: Mr. Chairman, subject
17 to a check with my friend Mr. Harper, I think
18 those are all of my questions.
19 THE CHAIRMAN: Other registered groups
20 that have questions? Mr. Bedford?
21
22 (OFF THE RECORD DISCUSSION)
23
24 MR. BEDFORD: I won't be as reckless
25 as Mr. Williams in promising you that I will be
5772
1 very short.
2 Dr. Miller and Mr. Torrie, good
3 afternoon. Mr. Torrie, I don't recall whether we
4 were formally introduced when you were here in
5 March. You do know my name is Doug Bedford and
6 you obviously know that I work for Manitoba Hydro.
7 I would like to start by I hope
8 establishing that there is something that we can
9 certainly agree upon, and that is that demand side
10 management, DSM as everyone calls it, is a good
11 thing in life.
12 MR. TORRIE: If you want an
13 acknowledgment, yes, it is right up there with
14 motherhood.
15 MR. BEDFORD: And when Mr. Kuczek, one
16 of my colleagues at Manitoba Hydro, tells me that
17 the current objective is to double the company's
18 plans for DSM, we are at least moving in the right
19 direction?
20 MR. TORRIE: Yes.
21 MR. BEDFORD: It puts us in a better
22 place I gather than some Canadian utilities that I
23 am told even today have no DSM programs, policies,
24 or plans, not even on the weekends?
25 MR. TORRIE: Not even on the weekends?
5773
1 MR. BEDFORD: I heard that somewhere.
2 I am correct and I have been informed
3 correctly, Mr. Torrie, that there are indeed some
4 Canadian utilities, to your knowledge, that don't
5 have any DSM plans?
6 MR. TORRIE: It wouldn't surprise me.
7 As I was saying earlier, there was a
8 collapse in the DSM marketplace and, you know,
9 Ontario came out of it in pretty rough shape, for
10 example. And some Canadian utilities were so far
11 behind that they didn't stop their DSM because
12 they never got started in the first place. I
13 would say in the scheme of things -- maybe this
14 will even allow you to not ask as many questions
15 to make the point that you might be seeking --
16 that Manitoba would definitely in Canada rank
17 among a very short list of Provincial electric
18 public utilities that stayed in the DSM game
19 throughout that period and didn't get out
20 altogether, probably partly because it is a public
21 utility and the policy mandate was always there.
22 But when it was nothing more than a business
23 decision, we saw a lot of the investment interests
24 evaporate in the mid '90's.
25 MR. BEDFORD: Thank you.
5774
1 Dr. Miller, I listened with interest
2 to your comments on training and jobs as they
3 relate to the proposed Wuskwatim projects, and you
4 offered up some thoughts on the subject of
5 training and jobs. Can I suggest to you, does not
6 the Wuskwatim generation project provide the
7 opportunity to individuals living in the north, I
8 am thinking particularly of First Nations persons,
9 Aboriginal persons, to obtain that critical level
10 of training and job experience, so that after
11 Wuskwatim they could move on to the kinds of jobs
12 that you suggested to all of us would be healthy
13 and worthwhile in our society, such as upgrading
14 homes and businesses, with DSM objectives in mind?
15 DR. MILLER: I imagine many of the
16 skills would be transferrable, but there may be
17 others that aren't, I don't know. And the
18 proportions might be different. I mean, moving
19 heavy equipment and excavation and so on might be
20 a less useful skill than home building. And home
21 building is different than just building forms for
22 concrete. So I don't know the degree of
23 transferrability, or the appropriateness -- the
24 most appropriate would seem to be working on homes
25 to acquire the specific skills for continuing to
5775
1 work on homes.
2 MR. MAYER: They also have to build
3 roads, Mr. Miller.
4 DR. MILLER: Not too many I hope.
5 MR. MAYER: Tell that to the
6 communities that are not yet connected to the road
7 system.
8 DR. MILLER: I will talk to them.
9 MR. BEDFORD: I know Mr. Torrie has
10 confirmed that he has read the NFAAT filing, and I
11 recollect that he mentioned the appendices.
12 Dr. Miller, have you as well had the
13 opportunity to read the NFAAT filing and the
14 appendices attached to it?
15 DR. MILLER: I certainly read the
16 filing. Frankly, I get lost in some of the
17 appendices.
18 MR. BEDFORD: Then I am going to take
19 about 40 seconds and commend to your attention
20 that portion of the appendices that deals with the
21 extensive thought and effort that has gone in to
22 the subject of training, particularly with NCN
23 members in mind, but beyond NCN members, other
24 northern Aboriginals. And my thanks to my
25 colleague, Ms. Matthew Lemieux, for reminding me
5776
1 that this was written some time ago. And I quote:
2 "There are also community based work
3 experience projects for designated
4 trades, carpentry and electrical
5 trainees, and local contractors are
6 provided with a $4.00 an hour
7 'contribution to contractor costs' for
8 the additional administrative and
9 supervisory work needed to manage
10 trainees on the work site."
11 And I won't belabour the point by taking you
12 through all of the charts, but I thought that
13 addressed directly the subject that you raised
14 that perhaps there are other sorts of work
15 experience and training for individuals at Nelson
16 House and other northern communities, and indeed
17 to me it seems obvious that thought has been given
18 to that very subject, and it is in place indeed in
19 connection with training for the Wuskwatim
20 project.
21 Now, I am not seeking for you to agree
22 or not. I said at the outset I would commend that
23 to your attention.
24 DR. MILLER: I am aware of the
25 training programs, both from reading and from your
5777
1 earlier presentations. I think that is an
2 extremely commendable feature of the whole
3 proposal. The only question is, can you do the
4 same for an aggressive northern DSM program? That
5 is the only question.
6 MR. BEDFORD: Mr. Torrie, at one point
7 this morning you succeeded in agitating a number
8 of those fine people who work for Manitoba Hydro.
9 You made a reference to one of the documents in
10 the NFAAT filing, I think it is an answer to a
11 TREE interrogatory 32b. And I am going to ask my
12 able assistant, Mr. Wojcznski, to pass out copies
13 of that, and I will take you through what has
14 caused the consternation.
15 Mr. Torrie, if you would look at the
16 second of the third pages, the problem -- or
17 perhaps I will better characterize it as a
18 misunderstanding -- that I gather occurred is you
19 were making a general characterization regarding
20 the planning that is done overall at Manitoba
21 Hydro, and you quoted from lines 7 to 11 of page
22 2, that suggests Manitoba Hydro does not approach
23 economic analyses in the way that someone like you
24 I guess would prefer. And what the document says
25 is, instead Manitoba Hydro's economic analyses use
5778
1 a more direct project specific approach.
2 Again, the concern that has bothered
3 some of my colleagues at Manitoba Hydro is that
4 you used the reference to criticize generally how
5 planning is done at Manitoba Hydro. They draw my
6 attention, and now I draw your attention and
7 others to the fact that those comments were
8 actually made in a narrow context with respect to
9 DSM planning, and how in the DSM field one looks
10 for a project specific analysis as to whether I
11 understand a particular proposal for DSM is
12 suitable or not suitable for Manitoba Hydro.
13 My able assistant reminds me that it
14 is the marginal cost look at each DSM project that
15 is of importance to us.
16 Do you stand corrected, or have I
17 misquoted you?
18 MR. TORRIE: Well, you have been
19 quoting yourself or Manitoba Hydro for most of
20 your question. I am not sure which -- can you
21 tell me what it is that you are suggesting that I
22 am in error on more concisely, please? Could you
23 summarize?
24 MR. BEDFORD: My colleagues understand
25 that you took the words from lines 7 to 11 and
5779
1 applied them out of context as a criticism to the
2 overall planning done at Manitoba Hydro.
3 MR. TORRIE: Well, first of all, they
4 are located physically in the very context which
5 you are claiming that I am taking them out of. So
6 I think that the reason that I sort of jumped when
7 I saw that paragraph, and as I tried to explain as
8 I was using it to illustrate a bigger point this
9 morning, is that whether or not in this particular
10 case it was intended for a narrower application,
11 and perhaps it was -- and perhaps that also was
12 part of my criticism -- the way that the point was
13 made here to me illustrated what I feel is a
14 pervasive philosophy throughout the NFAAT evidence
15 provided by Manitoba Hydro, and which I think goes
16 a long way to explain why every time we would ask
17 questions in this area, we would get back answers
18 that to us were non-responsive. Because there is
19 a tendency throughout the whole two volumes and
20 all of the interrogatories to focus everything on
21 the dam, and look at what might affect the dam,
22 and it doesn't trace back to the fundamental need
23 and the identification of alternatives.
24 So, I mean, I can see what you are
25 saying, but I remember when I read the paragraph
5780
1 and thought how beautifully it does represent what
2 I regard as part of the limiting problem here, I
3 went back and I did read the context, and at that
4 time, I thought, no, that is a fair passage to use
5 to illustrate the point that I am making. So I
6 don't really feel that it is out of context, I
7 think it is in context.
8 MR. BEDFORD: With respect to the
9 general criticism you've advanced, which other
10 consultants which have come here have also
11 advanced regarding the whole way in which the
12 NFAAT was prepared and has been presented, can I
13 suggest to you that the obvious alternatives to
14 building Wuskwatim are DSM, supply side
15 enhancements, some include wind, some have said
16 NUGs, those are the obvious alternatives?
17 MR. TORRIE: To you, those are the
18 obvious alternatives? Those would certainly be
19 elements of the alternatives, but in my mind, I
20 think of the alternatives as packages. So I
21 wouldn't single out a particular technology as an
22 obvious alternative. The need, as we were
23 discussing it earlier today, was to maintain
24 exports and profits therefrom. And that is not
25 done by technologies, that is done by revenue. So
5781
1 I would tend to define the alternatives at a
2 higher level than you are suggesting.
3 MR. BEDFORD: But the things that I
4 suggested, DSM, supply side enhancements, wind,
5 NUGs, those are components of these packages, some
6 of them have called them portfolios?
7 MR. TORRIE: Sure, yes.
8 MR. BEDFORD: Those are what the
9 portfolios are made up of. And I listened
10 yesterday when Mr. Harper and Dr. Higgin testified
11 and acknowledged that they share what I understand
12 is the identical concern that you have expressed
13 to us today, but they also said that they drew
14 some comfort from the fact that Manitoba Hydro has
15 stated publicly, as part of the NFAAT submission,
16 that it intends to pursue DSM, intends to pursue
17 wind development, intends to pursue supply side
18 enhancements, and I will concede that perhaps none
19 of them to the extent that you or to the extent
20 that some other intervenors have pressed us to do,
21 but we do intend to proceed with them. Does that
22 not modify to some extent your concern as to the
23 way in which the NFAAT was prepared and has been
24 presented?
25 MR. TORRIE: Well, yes and no. I
5782
1 mean, good intentions are found throughout the
2 document, and particularly in the area of DSM. It
3 always seems like what you are about to do is
4 going to be what you should be, you know, what you
5 suggest you should be evaluated against instead of
6 your track record, or instead of the utility's
7 track record. So intentions at least indicate
8 that there is a will to go in a certain direction,
9 but I think there is a limit to how much comfort
10 one can take from intentions if, when you analyze
11 deeper, you see possibilities for a repeat of a
12 similar cycle to the one the last time the good
13 intentions were there on DSM.
14 So, of course, we are all happy that
15 DSM is on the rise again at Manitoba Hydro. I am
16 sure that that would be the sentiment of the
17 clients that I have been working for. We have
18 never seen such a concentration of new programs
19 announced. I have seen this before when a utility
20 is trying to get permission to build something.
21 But I am not suggesting that they won't be
22 followed through on. But I guess I have lived
23 through too many cycles of utility promises that
24 weren't delivered on in DSM to take a great deal
25 of comfort from them.
5783
1 MR. BEDFORD: Can I suggest to you
2 that it strikes me your concern about the way in
3 which the analysis has been done, and the
4 thoroughness, or in accordance with your criticism
5 the lack thereof with respect to some alternatives
6 like DSM, would be far more decisive if what the
7 proponents of the Wuskwatim projects were saying
8 to these five Commissioners is it is an either/or
9 choice, we can either do Wuskwatim or we can do
10 some other alternative?
11 MR. TORRIE: Sorry, I must be getting
12 a little bit tired, I didn't quite understand the
13 question. Can we try again? I will try and
14 concentrate more here.
15 MR. BEDFORD: I think it is simply a
16 variation of what I have already put to you, that
17 the criticism coming from you of lack of
18 thoroughness in the way in which alternatives were
19 analyzed in the NFAAT, would be a far more
20 decisive criticism and far more valid if what the
21 proponents were saying is it is an either/or,
22 either we do Wuskwatim or we do something else,
23 But it is not an either/or, is it?
24 MR. TORRIE: The concern that I was
25 trying to get at this morning, in the context of
5784
1 NFAAT, was that if the need for Wuskwatim, and
2 particularly Wuskwatim advancement, is to maintain
3 exports and export revenues, and particularly
4 between now and 2020, my concern is that different
5 ways of doing that was not at the centre of the
6 NFAAT evidence. And it doesn't really have
7 anything to do with the either/or, the description
8 of the either/or choice that you are describing,
9 it is another point altogether.
10 We did a number of scenarios, some of
11 which had -- we did dozens of these when we
12 started playing with it. We had Wuskwatim
13 advanced by five years in some of them, we had it
14 not advanced at all in many of them. Our concern
15 was looking for ways of meeting the need, which
16 was maintaining export revenues and profits. And
17 in that regard you could almost say that we have
18 been presented with an either/or analysis by
19 Manitoba Hydro, because there is only one way of
20 doing that that has been put before the hearing.
21 MR. BEDFORD: I would like to move to
22 the subject of exports, so I am again going to ask
23 my able assistant to distribute a little package
24 that we put together. It is going to be very
25 familiar to you because one of the documents comes
5785
1 from one of your IR answers, and another document
2 comes from something that we distributed at the
3 outset of the hearing.
4 I am going to go through each of these
5 rather briefly. Mr. Mayer is correct, we have all
6 seen this before.
7 The first one indeed, Mr. Torrie,
8 comes from material that you have presented. And
9 in my simple way, I understand, I hope as you do,
10 that some of the key things we should draw from
11 this picture is the thick black line on top of
12 which rests the word "estimated on peak export
13 market." And I understand that that is a picture
14 or a representation of the tie line capacity
15 leading out of Manitoba which limits the amount of
16 energy that Manitoba can export -- we can say
17 Manitoba Hydro; am I correct?
18 MR. TORRIE: Yes, that is my
19 understanding, it is a combination of
20 technological and operational constraints.
21 MR. BEDFORD: If you will turn now to
22 the second picture -- the second picture, I can
23 remind everyone, comes from materials that were
24 filed at the outset of the hearing. Again, we see
25 that same thick black line, which in my simple
5786
1 understanding I gather represents that same
2 constraint, if I can call it that, a limit to the
3 amount of energy that presently can be exported
4 out of Manitoba, and it remains constant into the
5 future for purposes of trying to understand this
6 project.
7 What I also gather is of importance,
8 when one looks at this picture, are those words in
9 bold at the centre of the page near the top,
10 "median flow conditions." And I can remind us all
11 that this picture was initially presented in order
12 to set out what the picture would look like if
13 Manitoba Hydro were to become more aggressive on
14 the subject of DSM, and that this represents what
15 the energy production would look like if Manitoba
16 Hydro did five times DSM. And in effect, median
17 flow conditions stands as a surrogate when you run
18 a sensitivity for doing five times the current
19 level of DSM. That is my understanding. Is that
20 yours as well, Mr. Torrie?
21 MR. TORRIE: That is my understanding
22 of the way that Manitoba Hydro portrays it. But I
23 have to say that to me the very fact that rather
24 than actually doing the DSM scenario work, they
25 would put out the median low forecast as a
5787
1 surrogate, is reflective of almost the secondary
2 status that the whole DSM option gets in this
3 exercise. The median low forecast, you will
4 recall, is generated by assuming a reduction in
5 economic growth in the Province primarily, and a
6 more sophisticated -- and therefore, yes, you will
7 get less electricity demand, but you will not get
8 the same kind of drop, probably either in -- you
9 will get less electricity demand in a scenario
10 where there is less economic output. But it is
11 not really a good substitute for understanding the
12 lower demand that might come about even with the
13 higher economic growth, but with changed relations
14 between the economy.
15 And you could say, what is the
16 difference? It stills give you a line on the
17 graph. And in that regard my answer is yes, this
18 is put forward as a way of showing what happens to
19 the existing resources if the demand is lower than
20 it is in the basic forecast. And it does do that,
21 and that is the same exercise that we used in
22 looking at scenarios as well.
23 MR. BEDFORD: I know that the
24 proponents used this picture that we are looking
25 at to run, as I said, a sensitivity. The last
5788
1 page of the four-page package is simply again a
2 reproduction that comes out of the NFAAT
3 materials, and it is the sensitivity analysis.
4 And I remind us all that if you go right to the
5 bottom of the page and you look at the BB
6 sensitivity, there is the words repeated "median
7 low load growth," that the result is a very small
8 minus 0.3 percent effect on the economics for
9 Wuskwatim. And I know that you have seen that and
10 looked at that, and you and I won't disagree that
11 is the purpose of preparing the picture and then
12 running the sensitivity, to establish, as you have
13 acknowledged, that the proponents approached this
14 whole Wuskwatim proposal by suggesting that under
15 a variety of different sensitivities the Wuskwatim
16 projects will still make money?
17 MR. TORRIE: Yes, and that is actually
18 a really good illustration of why I felt the
19 passage that you quoted earlier, and which you
20 suggested that I was taking out of context,
21 actually reflects the kind of thinking that goes
22 on in these things within the organization in many
23 other more general ways, because it certainly
24 describes the approach to the analysis of
25 Wuskwatim that is reflected in the sensitivity
5789
1 analysis, which is very much supply oriented and
2 project focused.
3 MR. BEDFORD: One of the things they
4 didn't teach me in law school, but I have had to
5 learn, having joined Manitoba Hydro recently, is
6 that the really valuable commodity for sale in the
7 electrical energy world is something called firm
8 power, long term firm power -- I haven't learn the
9 lesson quite well enough yet. Sometimes, at least
10 sometimes I understand it as dependable energy,
11 and I have been told it relates to this 5 by 16
12 product, five days a week, 16 hours a day when
13 demand is high in the world for electrical energy.
14 Have I more or less got it right?
15 MR. TORRIE: I think you just named
16 three somewhat different things. Dependable
17 energy is more a concept that relates to the
18 supply of power. Firm energy is almost a
19 contractual term, as I understand, that relates to
20 the conditions under which power will be supplied.
21 It can also be sometimes used to refer to -- I
22 think that is the context in which you were using
23 it, it is a contractual firmness, if you like, a
24 guarantee over a long term. And the 5/16 power
25 could be provided on a firm basis, and could come
5790
1 from dependable sources. It would have to if it
2 was a long term contract, but it is not
3 synonymous, I don't think, with firm power.
4 MR. BEDFORD: Long term firm power, it
5 is the valuable product, it is the one that
6 commands money in the export market?
7 MR. TORRIE: Especially if it is in
8 that 5/16 peak time period.
9 MR. BEDFORD: And I have also learned
10 since joining Manitoba Hydro that the real
11 limiting constraint to Manitoba Hydro in
12 calculating and deciding how much of that valuable
13 long term firm power it has for sale is what the
14 low flow conditions are historically on the rivers
15 in Manitoba. Have I got that right?
16 MR. TORRIE: You have the same
17 understanding of it that I have, in any event.
18 MR. BEDFORD: And indeed, we have just
19 experienced, as most Manitobans know, very low
20 flow conditions in the last year. And so I've
21 been told that it would have been stupid for us to
22 have ever tried to market in a long term firm sale
23 years ago, or more recently, an amount of load
24 that would have exceeded what can be produced in
25 low flow conditions. Does that make sense to you?
5791
1 MR. TORRIE: I understand that
2 philosophy, that business strategy, as the way you
3 described it, and I believe that is the way that
4 Manitoba Hydro does business. It tries not to
5 commit power into long term firm contracts unless
6 it is dependable power, unless it is power that
7 they would even have in a low flow year.
8 MR. BEDFORD: And I have also been
9 told that if we didn't have intelligent people,
10 like Mr. Cormie and Mr. Wojcznski, working for us,
11 but if we had foolish people who did try and
12 market long term firm sales based on something
13 beyond what is generated in low flow conditions,
14 that the buyers in the market to which we sell
15 wouldn't be fooled by that, that they are
16 sophisticated enough to also know that they ought
17 not to buy from us sales of energy that would
18 exceed what our low flow conditions can generate.
19 Is that consistent with your understanding of the
20 market place?
21 MR. TORRIE: I think so, yes.
22 MR. BEDFORD: Which takes me to a
23 question that I heard you ask us all a few hours
24 ago. And the question that you posed, which I
25 gather is fundamental to the way that you've
5792
1 looked at the NFAAT and the Wuskwatim projects,
2 was, how can you maintain exports and profits?
3 And the answer I give to that question to you is,
4 you make sure that you have enough firm power to
5 fill your tie line capacity. And the answer you
6 gave wasn't quite the answer that I have given,
7 you do take us to the tie line capacity, but I
8 repeat my answer to your question is you maintain
9 enough firm dependable power to maintain the tie
10 line capacity. Do you follow what I am saying?
11 MR. TORRIE: I think so, yes.
12 MR. BEDFORD: Which now takes me to
13 the third picture. The third picture you will see
14 is an illustration of what the dependable energy
15 on the Manitoba Hydro system is with Wuskwatim.
16 And you will see the same thick dark line that
17 appears on the other pictures, which is the tie
18 line capacity. And you will understand now why I
19 had the third picture prepared, which was to
20 illustrate that even with Wuskwatim, there is a
21 long way to go before we fill up that tie line
22 capacity, based on dependable energy.
23 I can also tell you that I am assured
24 that this picture includes in the blue where it
25 says "existing resources" that same surrogate for
5793
1 five times DSM.
2 MR. TORRIE: Are you asking a
3 question, or are you making an argument, or what
4 is going on here?
5 MR. BEDFORD: I am obviously making an
6 argument through a picture, but I would like you
7 at this stage, because I do have a question coming
8 out of this, if we can turn the projector on and I
9 can ask you to bring up your picture that
10 illustrates, I think it was three times DSM, two
11 times wind, and other existing resources without
12 Wuskwatim, and there is a nice big blue area.
13 Mr. Abra had you look at that picture as well.
14 If we can all, Mr. Torrie, look at the
15 big area of blue on your picture, can you please
16 confirm for me that not all of the energy in that
17 big area of blue is long term firm power or
18 energy?
19 MR. TORRIE: Again, do you mean
20 dependable energy?
21 MR. BEDFORD: Yes?
22 MR. TORRIE: I used median flow
23 conditions for this whole series, I didn't use
24 dependable flow conditions. So, yes, all of the
25 charts that we presented were based on median flow
5794
1 conditions. And I think that is the answer to
2 your question.
3 MR. BEDFORD: I would like you now to
4 go back to the third picture that I presented to
5 you, that I didn't ask you a specific question
6 about, but if I look at that picture and I look at
7 the year 2018 --
8 MR. TORRIE: I need to know -- the
9 third picture, okay. That is the one based on
10 dependable energy?
11 MR. BEDFORD: Dependable flow
12 conditions, and I am looking at 2018, and I am
13 looking at that big stretch of white between the
14 top of the dark green Wuskwatim, in order to get
15 up to the tie line capacity. And by my very
16 simple-minded calculation, knowing this already
17 includes five times DSM, my conclusion is one
18 would have to do something approaching 12 times
19 DSM in order to get up to that tie line capacity
20 and fill it with dependable energy long term firm
21 sales. Is my estimate more or less in the
22 ballpark?
23 MR. TORRIE: I take your word for it.
24 MR. BEDFORD: Now, knowing that, and
25 knowing that the terms of reference for this group
5795
1 of five Commissioners is to advise the Minister
2 on, amongst other subjects, whether or not the
3 Wuskwatim projects have been selected upon
4 reasonable grounds, I suggest to you that even if
5 we were as captivated by the subject of DSM as I
6 know you obviously are, that to propose as an
7 alternative that Manitoba Hydro pursue 12 times
8 its present targets for DSM could not by anyone's
9 conclusions be considered reasonable, could it?
10 MR. TORRIE: Did I propose that? No.
11 MR. BEDFORD: What is your proposal
12 for a DSM target?
13 MR. TORRIE: I would like to see, you
14 know, the full work-up of the alternative, the
15 NFAAT analysis before really saying for sure what
16 that would be.
17 THE CHAIRMAN: Excuse me, Mr. Bedford,
18 you said that this, in this diagram, it included
19 five times DSM? Because this doesn't show that.
20 MR. BEDFORD: Mr. Chairman, the words
21 you will see in the heading just below the top
22 "median low load growth scenario," I guess
23 logically for me it is better to describe it as a
24 surrogate for five times DSM.
25 Mr. Torrie, can I correctly assume
5796
1 that your recommendation for an appropriate DSM
2 target would be something less than 12 times the
3 current DSM planning that is being used by
4 Manitoba Hydro?
5 MR. TORRIE: Yes.
6 MR. BEDFORD: Mr. Torrie, I can tell
7 you that I listened with much sympathy to the plea
8 with which you concluded your presentation
9 regarding the unhappy direction that the world has
10 gone, certainly in the last 100 to 200 years with
11 our greenhouse gas problem. I know that Dr.
12 Miller was addressing exactly the same subject in
13 his remarks. And listening to each of you, I
14 thought to myself, as a good citizen of the world,
15 not just of Manitoba or Canada, it would be
16 appropriate for us to consider all of our options,
17 and I think you are both urging us to do that. Am
18 I correct?
19 MR. TORRIE: One should always
20 consider all of one's options and then make a
21 choice.
22 MR. BEDFORD: And I thought to myself
23 that one of the good things about the Wuskwatim
24 projects that has been said over and over is that
25 they do displace fossil burning energy plants in
5797
1 that big country to the south of us. I am sure
2 you agree with that, do you not?
3 MR. TORRIE: In fact, when I was out
4 here earlier this winter, I had the opportunity
5 to -- I had to wait a couple of days for my turn.
6 And I've also noticed in the transcripts a number
7 of references to the greenhouse gas benefits of
8 Canadian Hydro power, Manitoba Hydro power going
9 into the U.S. And you know, I do a lot of work on
10 the greenhouse gas issue, and this kind of almost
11 opportunistic statement, while true, represents a
12 very narrow kind of window into what is happening
13 on the climate change file. And it reminds me a
14 lot of the phenomenon that I was talking about
15 earlier today, where after the first oil price
16 shocks, all of the supply side guys were there
17 saying, I am your man, nuclear power, I am your
18 man, price of oil is going up, don't worry about
19 it. In Ontario, Ontario Hydro said they would
20 build 65 nuclear reactors by 2010 or something
21 like that. Wind power, I am your man. Solar
22 power, I am your man. What they didn't do is
23 really take a broader and a deeper look at what
24 was going to happen on the demand side in response
25 to those shocks.
5798
1 I see the same thing going on with
2 regard to the Kyoto and the greenhouse gas
3 reduction field, where everyone -- Manitoba Hydro
4 is no different, and I wouldn't be too harsh about
5 it, it is fair game -- is saying, great, we can
6 take advantage and make a contribution because our
7 hydro power doesn't emit greenhouse gas emissions.
8 It is true as far as it goes, but it doesn't go
9 very far.
10 What will happen if North America in
11 particular makes a serious commitment to bringing
12 its greenhouse gas emissions down to stable levels
13 is that there will be an incredible transformation
14 on the entire, across the entire spectrum of fuel
15 and electricity consumption patterns. And there
16 is -- to give the point, I think that in that
17 scenario probably there will emerge very high
18 value added opportunities for hydro-electricity,
19 that probably even go beyond the kinds of things
20 that you are contemplating by just selling it to
21 the Americans.
22 That is the kind of analysis that I
23 think ought to be part of the type of scenario
24 work that I was describing earlier, because
25 otherwise you are not, as Wayne Gretsky would say,
5799
1 you are not necessarily skating to where the puck
2 is going to be.
3 MR. BEDFORD: That is rather where I
4 am going. If we leave aside for the moment
5 whether dependable energy should come from even
6 more hydro, or as I know you have been advocating,
7 more DSM, I thought to be a good citizen of the
8 world, Manitoba Hydro really ought to be looking
9 at expanding that thick dark line on those
10 pictures, the tie line capacity. Because if we
11 improve tie line capacity out of this Province,
12 and indeed across this country, does that not lead
13 us to where the puck ought to be going, to
14 transfer those DSM benefits that I know you and
15 Dr. Miller would really like to see us pursuing in
16 Manitoba, and which we are, so that we can help
17 those to the south of us -- and to the east, and
18 apparently to the west.
19 MR. TORRIE: And west? Do you want to
20 start with the west? Do you want to start with
21 Alberta?
22 I don't think that the expansion of
23 the tie line was something that came up anywhere
24 in Manitoba Hydro's evidence. Is this being
25 introduced now as something that is on the table
5800
1 for consideration? Because it is not something
2 that -- I have in a general way, in looking at
3 possible low emission futures for Canada,
4 concluded that a stronger east/west flow of hydro
5 power could be part of a low emissions scenario,
6 but it was in the context of a scenario that
7 included no additional hydro-electric development
8 in either Manitoba or Quebec -- not because it was
9 ruled out, but because the demand scenario that
10 goes along with a low emission future results in
11 such an increase in the efficiency of electricity
12 use that the demand for new mega projects remains
13 very, very soft for a long time to come in that
14 future.
15 So I took, frankly, quite a bit of
16 flack from my friends in the environmental
17 movement because they said, you know what is going
18 to happen, all of the pro-mega project folks in
19 Manitoba and Quebec are going to -- and this may
20 be what is about to happen right now -- are going
21 to start saying, you think it is a great idea to
22 build these inter-ties. While we did include
23 increased east/west flows, it was in the context
24 of a sustainable electricity future, not an
25 unsustainable one. And that makes all of the
5801
1 difference.
2 MR. BEDFORD: I am going to finish by
3 making my client very nervous for a minute or
4 two --
5 MR. TORRIE: You will succeed where I
6 have failed then.
7 MR. BEDFORD: I am going to pretend,
8 Mr. Torrie, that I am not a Manitoba Hydro lawyer,
9 but I am going to remain what I otherwise am, and
10 that is someone who has practiced law in this
11 Province for more than 20 years now. And perhaps
12 more than anyone else in this room, I can relate
13 to your obvious irritation at having received a
14 week ago a 36-page rebuttal document full of, some
15 of it new information. It takes time to assess
16 and interpret that and challenge it, and you
17 didn't have that time. And I repeat, I have been
18 a complainer about having received the same
19 treatment in reverse from time to time. But as I
20 observed and heard your irritation, I recalled
21 quickly that this Commission set some deadlines in
22 advance of the hearing, and I thought to myself,
23 had Mr. Torrie's answers to interrogatories been
24 filed by the deadline that the Commission set,
25 which was before the hearing began, the rebuttal
5802
1 that had to be filed by my client would have been
2 filed, as stipulated, before the hearing
3 commenced, and there would have been ample
4 opportunity for you to have explored with the
5 NFAAT panel the concerns that you've expressed
6 about the information that is in that rebuttal
7 document. And I firmly believe -- and remember
8 that I am pretending not to be a Manitoba Hydro
9 lawyer for a moment -- that this kind of process
10 benefits greatly when intelligent and
11 well-educated consultants like yourself have a
12 real chance to have a go at those competent
13 Manitoba employees, you can ferret out where these
14 numbers come from, and whether there is any
15 sleight of hand, and I am not suggesting there is,
16 but you can satisfy yourself as to whether there
17 is any sleight of hand in the numbers.
18 So, accordingly, over the last two
19 months, I have occasionally been the whiner and
20 complainer who asked when your interrogatories
21 were going to be filed. Because after 20 years of
22 experience, I could see that we would end up with
23 this dilemma, that the rebuttal would come so late
24 in the day that you wouldn't have a reasonable
25 opportunity to, in effect, rebut the rebuttal. So
5803
1 I must say to you -- and this isn't a question --
2 that you are the author of your own misfortune. I
3 am done. Thank you.
4 MR. TORRIE: Well, you know, fair
5 enough, but I think actually the problem -- this
6 is something that the Commission I am sure has
7 been thinking about -- the problem is not just
8 timing. The problem is that -- and I apologize
9 that the interrogatories were late, but at the
10 same time, we don't really want to open the
11 question of fairness here, Mr. Bedford, because I
12 don't think that your client would come out on top
13 in the big picture on that.
14 But setting that aside, it is more
15 than just timing. It is not the right process for
16 really getting to the bottom of some of these
17 kinds of back and forth issues. And Dr. Miller
18 may want to say something about this as well,
19 because he and I have had a couple of lengthy
20 dinner conversations about the difficulty of using
21 a rather rigid process like this to resolve things
22 like, well, what is the appropriate base year
23 number for a load forecast, for example? So I
24 think that -- and there are some ideas out there
25 for other mechanisms that an organization like the
5804
1 Clean Environment Commission might be able to use
2 that would be both more effective and probably a
3 lot cheaper than a hearing, but still would be
4 more than just an informal get together as well,
5 some kind of a working workshop format perhaps,
6 where you would make a lot more progress a lot
7 more quickly, and perhaps a lot more efficiently
8 than that interrogatory process that became the
9 tail that wagged the dog in this whole hearing.
10 I won't say any more about that right
11 now, except that there is a really worthwhile
12 conversation and bit of thought that ought to be
13 done on the question of whether there are
14 alternative mechanisms that could be used for some
15 aspects of this type of hearing.
16 I think today, for example, we have
17 made, I feel pretty good about the use we have
18 made of what is very, very expensive time. I was
19 worried that if sat here and started going down
20 deep in to the numbers, and lost everyone else in
21 the room, I would have gone home thinking, my
22 gosh, there is thousands and thousands of dollars
23 a hour for two people to have a technical debate,
24 there has to be a better way. So I am glad that
25 we avoided doing that. But there are still
5805
1 unresolved issues that would be worth getting to
2 the bottom of.
3 Whether the rebuttal would have been
4 earlier or not might not have really mattered,
5 because as is so typical of the NGO position and
6 their consultants in this type of exercise, we
7 have been running on empty for some time now. So
8 the issue with the rebuttal coming in only a week
9 ago -- really I think I said at the time, you
10 know, I didn't mean to be too harsh about that.
11 In fact, I was pleased to have it in advance of
12 getting here, because I thought maybe I wouldn't
13 see any response from Hydro before final argument,
14 so it helped me prepare to have it in advance, but
15 it was all over the line time. And any additional
16 time that I might put in, whether it was this past
17 week or a month ago, would also have been over the
18 line in terms of the resources that we had. You
19 know, we did a lot of work. And the choice that
20 an NGO has, and the consultants that they hire
21 have in these kinds of exercises is you agree at
22 the outset to undertake something for a fixed
23 price, you don't really know what you are getting
24 into, you haven't even seen -- in the case of
25 Manitoba Hydro, they also filed most of the bulk
5806
1 of their evidence in the form of interrogatory
2 responses. It was months after the grants were in
3 place before we really knew what the body of
4 evidence would look like. Yet we were still, you
5 know, you are there, you have got your fixed
6 resources to do whatever you can do. So we can't
7 go back to our board for more money when the
8 hearing gets expensive and drags out.
9 So we can go on, but there is a long
10 agenda of issues that go to the issue of fairness,
11 that go well beyond the rather small point that
12 Mr. Bedford was making. Thank you.
13 THE CHAIRMAN: Anything more? Dr.
14 Miller.
15 DR. MILLER: Can I just add to that?
16 A couple of comments, our other consultant in the
17 PUB interventions is an economist from Washington
18 State, Jim Lazar, and they seem to frequently have
19 negotiating, more informal negotiating sessions
20 and things like that to kind of hammer out what
21 would be an appropriate compromise. And I believe
22 that the Public Utilities Board is empowered to do
23 those things, and I believe your mandate is pretty
24 broad too, so that you can do investigations on
25 particular issues.
5807
1 The other thing is, you know, I draw
2 on my background with Manitoba model forest, which
3 was designed basically to get an alternative way
4 of addressing issues. And I and several other
5 folks who have environmental interests have been
6 meeting since 1999 with Hydro staff, and learned a
7 great deal from that, and had some great
8 conversations amongst ourselves and with Ryan
9 Kostyra, and individual presenters who would come
10 in. But, again, it wasn't a multi-stakeholder
11 forum.
12 One of my comments in my opening
13 remarks was, how did we get the current PowerSmart
14 new home standards? Well, Hydro sat down with the
15 builders who have I believe traditionally objected
16 to, you know, setting the bar higher. And if I
17 was in the room, would it come out any different?
18 I don't know, but it might have, you know, and
19 maybe we could have found a way to set the bar
20 higher, and do it better, set better objectives in
21 Manitoba.
22 So I think it is important, not just
23 to meet with one stakeholder group at a time, but
24 to have sessions in which issues can be hammered
25 out jointly, looking at the legislated principles,
5808
1 the sustainability principles that at least in
2 very general terms, we have all committed
3 ourselves to. That is my observation on that.
4 THE CHAIRMAN: I thank you both for
5 those comments. I can assure you that the Clean
6 Environment Commission is -- and including with
7 the partnership with PUB here -- is for us anyways
8 the first time we are involved in a Manitoba Hydro
9 proposal. And I have heard some of my colleagues,
10 and expressed some myself every day, there has to
11 be a better way. So you can be sure that we will
12 be exploring all such avenues, and we appreciate
13 your input in that.
14 Mr. Williams.
15 MR. WILLIAMS: I have an undertaking
16 that we had made, Mr. Chairman, but I will wait
17 until you've dealt with the TREE panel, as you so
18 desire.
19 THE CHAIRMAN: I see. Were there
20 other questions?
21 Again, I really reiterate our
22 appreciation for the work done here, thank you.
23 And we appreciate the suggestions that have been
24 made and welcome you to make others in the future
25 if you are inclined to do so.
5809
1 MR. TORRIE: Thank you very much.
2 DR. MILLER: Thank you.
3 THE CHAIRMAN: While the gentlemen are
4 going back to their places, Mr. Williams, you may
5 proceed.
6 MR. WILLIAMS: Mr. Chairman and
7 members of the panel, just so you are aware, if my
8 clients are ever given an opportunity to comment
9 on the same issue, they will have some thoughts as
10 well, but we won't share them now.
11 What I am providing with gratitude to
12 Mr. Wojcznski is exhibit CAC/MSOS 1008 now titled
13 "corrected." And I will just highlight for the
14 panel what I believe are six changes to it. If
15 you go down under parameters to the capital cost
16 reduction 2002 to 2009, there are two changes.
17 Under the first column, the 250 MW total, it
18 previously had read 5 percent per year, and it now
19 reads 5 percent to 2009. If you go over two more
20 columns under the 250 megawatts, there had been a
21 typographical error there and it said 5 percent
22 per year. It now says 2.5 percent per year. If
23 you go down to parameter power resource plan,
24 there has just been a wording change under the two
25 right-hand columns, both had originally said "no
5810
1 Wusk," then a comma, SSE, DSM, and it had left the
2 impression that there was no SSE or DSM as well.
3 So that has just been reworded to say it has SSE,
4 DSM, and no Wusk. And that is for the last column
5 there, 450 megawatts.
6 As you all learned yesterday, there is
7 no discount rate with IRR, so the actual parameter
8 IRR had had an "at a 10 percent discount rate," so
9 that has been removed and put where it belongs
10 under LEC, and that has been moved there.
11 So those are the changes. And again,
12 thank you to Hydro for assisting us with those
13 changes. I should add that the bottom line in
14 terms of IRR results or LEC do not change. They
15 were just typographical or grammatical changes.
16 MR. GREWAR: Mr. Chairman, if we might
17 just assign a corrected exhibit number, Summary of
18 Manitoba Hydro Calculations on Wind Power
19 Economics corrected, as CAC/MSOS 1011.
20
21 (EXHIBIT CAC/MSOS 1011: Summary of
22 Manitoba Hydro Calculations of Wind
23 Power Economics, corrected)
24
25 MR. GREWAR: Mr. Chairman, I believe
5811
1 that Mr. Strachan has an undertaking to come
2 forward as well.
3 THE CHAIRMAN: Yes, proceed
4 Mr. Strachan.
5 MR. STRACHAN: Thank you,
6 Mr. Chairman, one undertaking and one information
7 item. The undertaking is MC-81, produced
8 May 2002, updated Woodland Caribou Conservation
9 Strategy, or advise why not, and advise if an
10 update is contemplated for May of 2004.
11 I have inquired and have been informed
12 that a 2002 was not prepared, but a 2004 update
13 has been prepared. It is in the final review
14 stages in the department and will be released
15 shortly.
16 MR. MAYER: I appreciate that.
17 MR. STRACHAN: The information item is
18 in response to the Commission's interest in
19 environmental protection plans, and I thought
20 might be helpful to file for your information a
21 copy of the Environmental Protection Plan that was
22 required and developed under the Environment Act
23 license for the Glenboro Harvey line in November
24 of 2002. So it will give you an appreciation of
25 the context and the detail that can be contained
5812
1 in an environmental protection plan. So I can
2 leave that with your information, if you so
3 desire, Mr. Chairman.
4 THE CHAIRMAN: Yes, thank you, and Mr.
5 Grewar will file it.
6 MR. GREWAR: Thank you, Mr. Chairman.
7 Then I guess we would assign Glenboro Rugby Harvey
8 230 kV Transmission Project Environmental
9 Protection Plan, February 2002, Manitoba Hydro, as
10 MC-1003.
11
12 (EXHIBIT MC-1003: Glenboro Rugby
13 Harvey 230 kV Transmission Project
14 Environmental Protection Plan,
15 February 2002)
16
17 THE CHAIRMAN: Thank you. We have a
18 scheduled presentation from the Industrial
19 Electrical Workers at 3:00 o'clock, and that will
20 be followed by a presentation by the Assembly of
21 Manitoba Chiefs. So right now I think is the
22 appropriate time to have the break. We will be
23 back here at 3:00 o'clock.
24 (PROCEEDINGS RECESSED AT 2:45 P.M.
25 AND RECONVENED AT 3:00 P.M.)
5813
1
2 MR. GREWAR: Mr. Chairman, we were
3 waiting for an indication from Hydro as to whether
4 or not an exhibit number should be assigned to one
5 of the graphs that was presented just of late
6 during the cross-examination, which is the energy
7 available for export, medium low load growth
8 scenario, and the question as to whether or not
9 that was any different from documents previously
10 filed or whether that required a new exhibit
11 number.
12 MR. BEDFORD: I would suggest that you
13 just make the package a new exhibit. Most of it
14 comes from other places, but the third graph
15 doesn't, it is new.
16 MR. GREWAR: It is new, that is what
17 we were thinking. Mr. Chairman, then, if we could
18 assign an exhibit number to this document and we
19 will call it a package of cross-examination
20 documents to be listed as MH NCN 1038.
21
22 (EXHIBIT MH/NCN 1038: Cross-examination Reference
23 Material CNF/RCM/TREE 1 NFAAT-4 REV, Energy
24 Available for Export Medium-Low Load Growth
25 Scenario Median Flow Conditions; Energy Available
5814
1 for Export Medium-Low Load Growth
2 Scenario-Dependable Flow conditions;
3 MH-NCN-NFAAT-S-2a Revised: January 16, 2004)
4
5 THE CHAIRMAN: I now call upon
6 Mr. Garnet Boyd of the International Brotherhood
7 of Electrical Workers.
8 MR. BOYD: That's correct. Thank you
9 for allowing me to attend this afternoon on short
10 notice.
11 THE CHAIRMAN: Mr. Grewar will swear
12 you in and then you can --
13 MR. GREWAR: Sir, if you could just
14 state your full name for the record, please.
15 MR. BOYD: Garnet Boyd.
16 MR. GREWAR: Mr. Boyd, are you aware
17 that in Manitoba it is an offence to knowingly
18 mislead this Commission?
19 MR. BOYD: Yes, I do.
20 MR. GREWAR: Do you promise then to
21 tell only the truth in proceedings before this
22 Commission?
23 MR. BOYD: I do.
24 MR. GREWAR: Thank you, sir.
25
5815
1 (GARNET BOYD: SWORN)
2
3 MR. BOYD: I'm Garnet Boyd, business
4 manager with the International Brotherhood of
5 Electrical Workers, local 2034, and we represent
6 the field employees on the electrical side of the
7 business with Manitoba Hydro.
8 As everyone here is aware, Wuskwatim
9 is a 250-megawatt hydraulic generating station
10 that is being built with a low head design. This
11 design will keep flooding to a minimum. From
12 reports that I have read in the areas going back
13 through it, it is anticipated that we are looking
14 at 10 acres, therefore limiting the environmental
15 damage.
16 There has been a lot of discussion
17 whether Manitoba Hydro should build Wuskwatim
18 Generating Station or consider alternative
19 sources. Alternative sources of wind power, of
20 looking at gas turbines, those areas of other
21 environmental concerns.
22 Throughout the years Manitoba Hydro
23 has incorporated many different initiatives which
24 they still have today, looking at PowerSmart
25 programs where there is incentives that date back
5816
1 to whether it is in the industries, to helping
2 them conserve energy, to the residents of
3 Manitoba, going back into the areas as well, for
4 residential areas on conserving energy. And there
5 is only to a point that you can work on them. It
6 is now coming to a time for us to maintain our
7 rates as we have in Manitoba that we need to look
8 at moving on with those areas, along with
9 continuing with the programs.
10 As I mentioned there are many
11 environmental alternative energy sources, but if
12 you are looking at the wind generation which has
13 been one of the big topics in Manitoba in the last
14 while, there are also many environmental concerns
15 here as well. And to look at the size that we
16 would have to look at for production in those
17 areas, just due to the sheer number of wind
18 turbines that would be required, there is
19 environmental concerns, and the other concern that
20 we have not seen anything coming back on reports
21 is the efficiency of the turbines, especially in
22 our extreme climate weather.
23 We are all aware that previous
24 projects that Manitoba Hydro, and the union in
25 particular have been involved with have created
5817
1 systemic barriers. And we want to ensure that
2 this does not happen again. To ensure this we all
3 have to work together. So this review that we are
4 having today and that has been ongoing, along with
5 the partnership of NCN and the local communities
6 on this project, are pivotal. IBEW local 2034 and
7 Manitoba Hydro have negotiated incentives to
8 address training and employment opportunities with
9 Manitoba Hydro. We have Aboriginal pre-placement
10 training programs where we bring people in to the
11 areas going back through it, they are 10 month
12 programs going through, they have opportunities to
13 see what alternatives of work and opportunities
14 that are within Manitoba Hydro. We have also
15 included into the one, the technical trades,
16 Aboriginal placement training programs. We have
17 construction work associated with northern
18 Aboriginal communities allowing employment of
19 local residents. And the latest venture that we
20 are moving in to is we have put together a
21 Gull/Wuskwatim employment task team. This
22 initiative working with the local communities in
23 those areas and working with NCN and the technical
24 training centre, looking at establishing in Nelson
25 House, which works with our indentured training
5818
1 programs that we have a number of our members
2 working with through Manitoba Hydro, and in those
3 areas that are tied together with Red River
4 Community College, ACC and Keewatin in The Pas.
5 The initiatives that I have just
6 spoken to, along with the Allied Council
7 Agreements that will be in place in building
8 Wuskwatim, will ensure that the Aboriginal
9 communities will receive the education, training
10 and employment, not only on the construction but
11 also in the operation and maintenance of the
12 generating stations. Once the construction is
13 completed it will require administration staff,
14 utility workers, storekeepers, mechanical techs,
15 electrical technicians, station operators,
16 supervisors and managers to operate the generating
17 station.
18 There also have been many
19 presentations addressing concerns of this project
20 being financially viable. Once Wuskwatim is
21 completed, it will be in operation for decades.
22 Therefore, it will more than pay for itself.
23 There has been different initiatives put into
24 building Wuskwatim and these additional dollars
25 spent on training initiatives is an investment in
5819
1 the local communities. We have to remember our
2 biggest pool of employees for all Manitoba
3 employers, and not just Manitoba Hydro, is our
4 Aboriginal communities, and we must work with them
5 to ensure that they are afforded every opportunity
6 to receive the education and training to be able
7 to fill the void we have in our labour force.
8 We know all projects, no matter what
9 is being constructed or built, have pros and cons.
10 And I believe the positives of this project far
11 outweigh the negatives, because this is a joint
12 venture. One that minimizes flooding due to its
13 design, will start addressing systemic barriers
14 through education, training and employment of
15 local residents, this is including the local
16 communities as major stakeholders, and will help
17 maintain Manitoba Hydro rates for all Manitobans
18 as the lowest in North America.
19 Energy is in great demand, as was
20 demonstrated by the blackout that we had in
21 Ontario and the northeast coast of the United
22 States. Hydraulic generation is a clean and cheap
23 producer of electricity and hydroelectricity
24 power, and hydroelectric power is one of our
25 greatest resources. This is a resource that we
5820
1 have the opportunity to work with to compete with
2 the other provinces, and through those areas going
3 through hydraulic generation, is far advantageous
4 than going to what Ontario may be moving towards.
5 We have all heard reports that they may be going
6 back to the area of bringing back their nuclear
7 generation. There are many environmental concerns
8 that are through those areas, and Manitoba has an
9 opportunity through this construction and
10 potentially future construction to address energy
11 concerns that we have in North America and that is
12 beneficial to all Manitobans. Thank you.
13 THE CHAIRMAN: Thank you, Mr. Boyd.
14 Mr. Sargeant.
15 MR. SARGEANT: Mr. Boyd, does 2034
16 represent construction electricians?
17 MR. BOYD: We have a few construction
18 electricians working with us, but that is mainly
19 2085, IBEW local 2085 for the inside wiremen.
20 MR. SARGEANT: So you can't speak to
21 2085 concerns or issues -- I think one of the
22 issues that has come up before us in our hearings
23 has been the availability of jobs on the project
24 itself, on the construction project itself,
25 particularly for northern residents and
5821
1 particularly Aboriginal northern residents?
2 MR. BOYD: I can't speak directly for
3 local 2085, but I know Manitoba Hydro in working
4 with the Allied Council Agreements and are looking
5 at putting that in place in the agreement on the
6 construction going back through there that will be
7 employing local residents.
8 MR. SARGEANT: I think the Allied
9 Local Council is coming before us in a week or two
10 and we can talk to them about it. Thank you very
11 much.
12 THE CHAIRMAN: Mr. Nepinak.
13 MR. NEPINAK: Mr. Boyd, it is
14 encouraging to hear that the barriers I guess will
15 come down for First Nations people should this
16 project go ahead. My question is, and maybe you
17 have answered it already on a question, but I
18 didn't quite understand, is your local the main
19 union in all hiring, in all aspects of the
20 project?
21 MR. BOYD: No, it isn't. Our local
22 represents the employees, field employees for
23 Manitoba Hydro on the electric site. We say the
24 field employees, and there is the acquisition of
25 Centra Gas, so that is separate from. But on the
5822
1 electrical side, the field employees, they are
2 IBEW local 2034. We will have some inspectors on
3 the original construction of the job. But we
4 will -- members that we will have and representing
5 there will be those that are hired to fill the
6 positions once the construction is completed.
7 MR. NEPINAK: How many would you say
8 have First Nations or Aboriginal people in your
9 union at this time, present time, if any?
10 MR. BOYD: I would be giving an
11 estimate on the numbers going back through there.
12 I would say we would be in the neighborhood now of
13 approximately 2350 members, so we would likely be
14 sitting at 10, 15 percent.
15 MR. NEPINAK: Okay. The list that you
16 named here for three or four different groups, how
17 many people do you see -- how many of these, again
18 how many members -- you identified First Nations,
19 but how many in total would benefit from the
20 project?
21 MR. BOYD: If we can get the training
22 available into the areas, we know the project
23 itself is a six year project in building
24 Wuskwatim. Training programs going through in the
25 areas are four years upon graduation in the
5823
1 trades. We have a number right now that are
2 already hired with Manitoba Hydro working through
3 the programs. There is a number to still hire for
4 total jobs likely at Wuskwatim, being a smaller
5 generating station than compared to say Limestone
6 in that area, but we are still likely looking at
7 20 full time positions in there. And most of
8 those will be coming from new hired positions that
9 will be going into them. So if we can get people
10 trained into those areas, they can fill them all.
11 There is that opportunity to get there to do that.
12 But as I said, some of them will take training.
13 We have a number right now that are sitting in
14 positions to be able to move into them now and
15 graduating.
16 MR. NEPINAK: NCN has stated that
17 25 percent or a percentage is open to non-NCN
18 First Nations members for employment, for training
19 in this area. Non-NCN members, do they need to be
20 union or how do they get to --
21 MR. BOYD: We are a little different
22 ourselves as being a utility. As a utility local
23 union we do not do any hiring. We are not the
24 same as a hiring hall that will be there with
25 construction. With our line construction section
5824
1 that we have the jurisdiction for, there we work
2 as a hiring hall where a contractor will phone us
3 and say we need X number of linemen to come to
4 work. When these positions will be filled, all
5 hiring is 100 percent by Manitoba Hydro. Once
6 they are hired, they will then move into the
7 respective bargaining unit or union that is there.
8 So with Manitoba Hydro we do absolutely no hiring.
9 MR. NEPINAK: Thank you.
10 THE CHAIRMAN: Ms. Avery Kinew?
11 MS. AVERY KINEW: Mr. Boyd, I was
12 wondering is your union part of the Allied Workers
13 Council?
14 MS. AVERY KINEW: Yes.
15 MR. BOYD: We hope we will be on
16 building the new downtown tower. But at the
17 present time that is with the building and
18 construction trades.
19 MS. AVERY KINEW: I was wondering for
20 the purposes of the Burntwood agreement and
21 updating it for the Wuskwatim project, is your
22 union part of that?
23 MR. BOYD: Could you repeat that,
24 please?
25 MS. AVERY KINEW: There is what is
5825
1 called the Burntwood Nelson agreement that is the
2 master agreement for hiring and for how the
3 construction will go.
4 MR. BOYD: That's right.
5 MS. AVERY KINEW: Is your union part
6 of that?
7 MR. BOYD: No, we are not. That would
8 be involved with the building trades, that would
9 be IBEW local 2085 that is there with the
10 construction electricians.
11 MS. AVERY KINEW: I also wondered, I
12 just had the opportunity to go out west and was
13 hearing about some of the things that Syncrude has
14 done, and one of which is one of the closest First
15 Nations, they hire every First Nation graduate
16 from high school and they offer them a permanent
17 job. Would the union have any objection to that
18 kind of approach with Manitoba Hydro?
19 MR. BOYD: Going back through in the
20 area, there is the opportunities there in hiring.
21 We have absolutely no say in hiring. If Manitoba
22 Hydro wanted to go 100 percent Aboriginal that is
23 their choice. We have no say in how Manitoba
24 Hydro hires employees.
25 MS. AVERY KINEW: Thank you, sir.
5826
1 MR. BOYD: We just want to be sure
2 that we represent everybody fair and equally and
3 equitably after they are hired.
4 THE CHAIRMAN: Other questions?
5 Seeing none, thank you very much, Mr. Boyd.
6 MR. BOYD: Thank you.
7 MR. GREWAR: Mr. Chairman, if we might
8 enter the brief of the International Brotherhood
9 of Electrical Workers as OTH-1030.
10
11 (EXHIBIT OTH-1030: Submission by
12 International Brotherhood of
13 Electrical Workers, submitted by
14 Garnet Boyd)
15
16 THE CHAIRMAN: I now call upon Chief
17 White Bird of the Assembly of Manitoba Chiefs.
18 MR. GREWAR: Yes, sir. Could I ask
19 you to please state your name for the record.
20 CHIEF WHITE BIRD: My name is Dennis
21 White Bird. I am from the Rolling River First
22 Nation. I'm currently the Grand Chief of the
23 Assembly of Manitoba chiefs.
24 MR. GREWAR: Sir, are you aware in
25 Manitoba it is an offence to knowingly mislead
5827
1 this Commission?
2 CHIEF WHITE BIRD: I do now.
3 MR. GREWAR: Knowing that, do you
4 promise to tell just the truth in proceedings
5 before this Commission?
6 CHIEF WHITE BIRD: I do.
7
8 (CHIEF DENNIS WHITE BIRD: SWORN)
9
10 THE CHAIRMAN: You may proceed.
11 CHIEF WHITE BIRD: Tansi,
12 commissioners, ladies and gentlemen. As I have
13 stated before, I am the Grand Chief of the
14 Assembly of Manitoba Chiefs. My name is Dennis
15 White Bird, a citizen of the Rolling River First
16 Nation.
17 As Grand Chief I speak in support of
18 the rights of First Nations in Manitoba, rights to
19 our homelands and livelihood, to nurture our
20 youth, support our elders and to ensure our future
21 as peoples and nations. Nisichawayasihk Cree
22 Nation seeks to exercise those rights, as do all
23 First Nations. I am here to support them. And
24 the Executive Council of the Manitoba Chiefs
25 support them through resolution moved by consensus
5828
1 on April 28, of this year. And I would like to
2 read the resolution into the record.
3 "Motion number 2, decision reached by
4 consensus at the Assembly of Manitoba
5 Chiefs, Executive Council of Chiefs
6 meeting, held on April 28, 2004; moved
7 by Chief John Thunder and seconded by
8 Chief Ron Evans. That the Executive
9 Council of Chiefs support the
10 Nisichawayasihk Cree Nation with
11 regard to the Wuskwatim project."
12
13 The Lake Winnipeg/Churchill/Nelson River project
14 has had devastating impacts to First Nations and a
15 way of life. First Nations had little voice in
16 the decision to go ahead with this massive system
17 of projects, little say in the future and no
18 control over huge impacts to their homelands.
19 In the present context of
20 environmental regulations, tribunals, entrenched
21 treaty and Aboriginal rights, case law and First
22 Nation leadership, the Lake Winnipeg/Churchill
23 Nelson River may never have proceeded. But
24 nevertheless it did go ahead and affected all
25 First Nations. And affected First Nations have
5829
1 been negotiating a way of life ever since - a way
2 to exercise rights and to gain livelihood in a
3 transformed economic and environmental setting.
4 There has been compensation, but not
5 enough to restore First Nations already impacted
6 by colonialism and loss of livelihood. Economic
7 recovery is the imperative for all First Nations.
8 I urge the Commission to give this due weight and
9 consideration. Economic recovery is what
10 Nisichawayasihk seeks, a future of economic
11 independence, as do all First Nations.
12 Nisichawayasihk should have that opportunity.
13 I respect the Commissioners for
14 undertaking their serious mandate in assessing
15 these projects, these proposed projects and making
16 recommendations. I would encourage you to think
17 in terms of making your recommendations to the
18 citizens of Nisichawayasihk Cree Nation, the
19 ultimate decision-makers on these projects, as
20 they should be in the homelands of Nisichawayasihk
21 Cree Nation. If Wuskwatim is a sound project, the
22 Nisichawayasihk should have the opportunity to
23 decide whether to proceed.
24 I commend Nisichawayasihk for the
25 participatory process that they have followed in
5830
1 reaching difficult decisions in a trail breaking
2 venture, through a participatory process guided by
3 the teachings and the great traditions of the Cree
4 Nations. Empowered with the decision on
5 Wuskwatim, Nisichawayasihk will seek consensus
6 through a participatory decision making process
7 guided by the teachings and great traditions of
8 the Cree Nation, as it should be in the homelands
9 of the Nisichawayasihk Cree Nation.
10 The CEC hearings themselves have been
11 an intrusive process that has placed First Nations
12 in yet another adversarial multi-stakeholder
13 forum. I encourage you to consider the impacts of
14 this process in ways in which future project
15 reviews and decision making can be improved.
16 Nation to nation relations guided by rights and
17 the imperative of First Nation economic recovery
18 should be a standard for resource use decision
19 making in Manitoba.
20 Past Hydro development has left a
21 legacy of outstanding issues that must be
22 addressed. Incremental decision making and
23 project by project reviews do not address these
24 broader issues. I recognize that this goes beyond
25 the scope of your terms of reference, but we need
5831
1 a broader forum. I hope that you will recommend
2 that Government deal with the broader issues that
3 you can not address, but which are so evident in
4 these hearings. Add your voice to the many
5 commissions and courts that have called for
6 modernizing relations to honour the original
7 spirit and intent of our treaty relationship in
8 contemporary terms. Add your voice to the call
9 for correcting past injustices and address
10 contemporary needs.
11 We have an opportunity to pursue this
12 with the assistance of the Treaty Relations
13 Commission that the Crown of Canada and First
14 Nations in Manitoba have jointly commissioned. I
15 would encourage you to honour our treaties and
16 honour for the Crown. First Nations are not
17 finished with Hydro or other resource users in our
18 homelands. Resource revenue sharing and access to
19 lands, water and resources are issues that need to
20 be addressed and another area that the CEC might
21 touch on.
22 I encourage you to add your
23 recommendations to those of the Royal Commission
24 on Aboriginal People which recognizes that,
25 "Before Canadians can expect to see an
5832
1 end to the enormous waste in human and
2 financial resources that accompanies
3 the economic and social
4 marginalization of Aboriginal peoples,
5 they must come to terms with a
6 redistribution of this country's land
7 and resource base."
8 And if Nisichawayasihk Cree Nation can
9 blaze a trail in restoring sustainable First
10 Nation economies, I congratulate them. Meegwetch.
11 Dennis Whitebird.
12 THE CHAIRMAN: Thank you. Questions?
13 I see none. So we appreciate you taking the time
14 and thank you for your presentation and
15 suggestions made to the Commission. Thank you.
16 MR. GREWAR: Mr. Chairman, if we might
17 enter as exhibit OTH-1031, the presentation of the
18 Assembly of Manitoba Chiefs Secretariat.
19
20 (EXHIBIT OTH-1031: Presentation of
21 the Assembly of Manitoba Chiefs
22 Secretariat, submitted by Dennis White
23 Bird, Assembly of Manitoba Chiefs)
24
25 THE CHAIRMAN: Are there other
5833
1 presenters at this time? I don't see anyone, but
2 I understand that maybe Hydro may have some
3 undertakings?
4 MR. THOMAS: Mr. Chairman, with
5 response to undertaking number 69, there was a
6 question asked whether elders were involved in the
7 definition of traditional knowledge, and I
8 provided an undertaking to get the answer for
9 that.
10 NCN defines traditional knowledge very
11 broadly. NCN members have accumulated traditional
12 knowledge during the course of their lives from
13 experience and interaction with friends,
14 relatives, including elders. Speaking personally,
15 I have learned many things from older relatives
16 and other NCN elders during the course of my life.
17 When NCN future development team members sat down
18 with Intergroup Consultants to put down a formal
19 definition of traditional knowledge on paper, they
20 drew on their life experiences, they drew on
21 knowledge they had acquired from NCN elders and
22 others.
23 There were no elders from South Indian
24 Lake that were present at that time. However,
25 there was an NCN community consultant from South
5834
1 Indian Lake who was present. She participated in
2 the process of putting a formal definition of
3 traditional knowledge into words. She drew on her
4 life experience, including many things that she
5 had learned from elders living at South Indian
6 Lake. Therefore in a very meaningful way, elders
7 of South Indian Lake contributed indirectly to the
8 definition of traditional knowledge. Some elders
9 were interviewed during the course of the
10 Wuskwatim studies. Among other things some elders
11 from South Indian Lake attended an elders'
12 retreat. The NCN view of traditional knowledge
13 helped shape the general study process.
14 It should also be noted that many NCN
15 members at Nelson House have spent time at South
16 Indian Lake and vice versa. Some individuals who
17 live at one location today, grew up at the other
18 location.
19 Most NCN members at Nelson House have
20 relatives living at South Indian Lake. NCN elders
21 at Nelson House and those at South Indian Lake are
22 not completely different. They are often friends
23 and relatives. They do have some differences, but
24 they also have very many things in common. We
25 also have a number of people from the community of
5835
1 South Indian Lake who are NCN members who have
2 decided for their own reasons to relocate to NCN,
3 to Nelson House, and they have been with us. We
4 have a number of them in Nelson House, and they do
5 participate in our forums and our open houses, in
6 our surveys. So from that context, we do have
7 input of their traditional knowledge as well.
8 In addition we do use one of our
9 elders who is originally from South Indian Lake,
10 and he is Sam Dysart. He is a very well known
11 resource user and very knowledgeable about our
12 traditions as hunter, fisher and trapper, from
13 that respect, of our way of life. So he
14 participates in our sessions as well. So to that
15 extent we do have South Indian Lake elders
16 involved, although they weren't there specifically
17 to address putting down in words the definition of
18 traditional knowledge itself. Thank you.
19 THE CHAIRMAN: Thank you, Mr. Thomas.
20 I might add that he also tells me he is the
21 champion bannock maker, and I believe him. Are
22 there other undertakings to be filed today?
23 MR. BEDFORD: If you can give us five
24 minutes we might be able to hand it in.
25 THE CHAIRMAN: We can do it tomorrow.
5836
1 MR. BEDFORD: Someone has to review it
2 obviously, and once the review is done, then we
3 can photocopy it and hand it in.
4 THE CHAIRMAN: We will wait for
5 tomorrow. I will ask again, are there some people
6 in the room who haven't had the opportunity to
7 make a presentation with their views on the
8 project and wish to do so? Mr. Grewar, do we have
9 other business to undertake today?
10 MR. GREWAR: No, Mr. Chairman, nothing
11 that I have. We have scheduled presentations, of
12 course, for tomorrow. The Manitoba Metis
13 Federation will be here to conduct their
14 cross-examination of Hydro/NCN on the EIS, which
15 will then be immediately followed by the
16 presentation of their evidence and appropriate
17 cross-examination, and that should likely take us
18 throughout the morning. In the afternoon we are
19 endeavoring to set up one or two presenters as
20 well, MKO being one of the ones that we believe we
21 have confirmed for tomorrow afternoon. That
22 concludes today.
23
24 THE CHAIRMAN: Thank you, Mr. Grewar.
25 That being the case, we will adjourn at this point
5837
1 and reconvene at 9:00 o'clock tomorrow morning.
2
3 (ADJOURNED AT 3:40 P.M.)
4